iTunes price increase takes world by surprise

Last Tuesday, April 7, millions of music seekers were shocked upon opening iTunes. Instead of scoping new music released that day, iTunes users were greeted by increased prices on certain songs. The hottest tracks on iTunes, including Lady GaGa’s “Poker Face” and Flo Rida’s “Right Round,” now cost $1.29 instead of the regular $0.99. The seemingly sudden increase in prices for certain songs poses a serious question: Is the decade of the $0.99 song dead? Apple did not publicly announce the decision to increase the price of certain songs but had been facing pressure from record companies to do so since iTunes’ launch in 2003. The company resisted the pressure to allow flexible pricing because, as Apple Inc. argued, it would stifle sales. However, the company finally gave into pressure from record companies last January and decided to introduce a new “variable-pricing” strategy. This strategy bases the price of a music download on the artist’s and song’s popularity. Thus songs that now cost $1.29 are the hottest songs on iTunes, such as those featured on the Top 100 songs list and classic songs that continually sell well such as “Wanted Dead or Alive” by Bon Jovi. Along with the price hike, certain songs also declined in price to $0.69. These songs include undiscovered songwriters and back catalogs. Even though some songs increased and decreased in price, the majority of songs did not change prices, as was predicted by the Los Angeles Times. The price raise comes along with an added bonus to many music lovers. Apple has dropped the “DRM” or anti-piracy mechanisms attached to all songs purchased on iTunes. Originally, the DRM made it impossible for buyers to copy and share music purchased on iTunes. A possible coping strategy, for those who do not like the 30-cent price hike, is to buy songs from Amazon, which still carries “DRM”- free $0.99 or $0.89 songs. Those in pain over the new and seemingly sudden increase can also obtain accounts on unlimited music stores such as Rhapsody. Users pay a standard flat fee every month and can download as many or as few songs as each pleases. People can also go old-school and begin buying actual CD’s again too. New promotion deals that include the purchase of a $1.29 song and then getting a discount on another song are sure to attract music downloaders. Also, deals that include a package of songs for a discounted price help make the price increase seem bearable. It is too soon to know whether or not the price hike will effect online music downloads, but one thing is certain. A hot new release from a popular artist will attract people who will download the song no matter what the price is.