Tuesday, April 7, 2009

iTunes New Pricing Scheme -> Bring On The Competition!

It's April 7, 2009 and iTunes just introduced their new pricing scheme. You would think that signals a good thing, but not so fast. Starting today, you will find many of your favorite songs for $1.29, a 30% hike on the former price tag.

Let me start off by saying music is moving towards free. I won't say it's there yet, but it's sure inching closer. Why would iTunes be moving in the opposite direction?

It must be a natural heuristic that items <$1 are met without much consumer deliberation. Yet, once you cross the dollar threshold, you've entered an entirely new ballgame. I speak as a consumer within their target demographic! If I was ever willing to purchase singles for convenience purposes at $.99, I am a lot more tempted to deal with the "hassle" of pirating the material now.

It may just be a $.30 increase, but it sure feels like a $3 change. Have they not read the recent reports that indicated 95% of music consumed in 2008 was "illegally" downloaded? Are they really hoping to  bring that percentage down?

It's also funny & ironic to note how much I dislike the move to $1.29, but I commend the move to $.69 for some deeper catalogue material. Yet, I'm holding full judgement until I see exactly what percentage of the tracks see the $.69 price point. Additionally, this factor will not keep their customers from seeking alternatives.

Speaking of alternatives, I have been raving about the Amazon MP3 Store since it was initially introduced in October 2007. They have been offering "variable pricing" since day one, as well as DRM-Free content (less restrictions) & better bit rates (sound quality). The store also possesses a cleaner interface and such additional advantages as the ability to "preview all" of an artist's tracks at once compared with manually clicking one at a time on iTunes. 

It's a shame that most people don't understand that downloads from Amazon sync seamlessly with your iTunes library after your initial purchase.

Despite iTunes holding a ~80% market share of the digital paid download space, they better watch out for Amazon. Although pressure from the major record labels had influence over the new pricing scheme, iTunes just opened up the door for their first legitimate competitor in the six year existence. 

If that's the moral of the story, I guess that works for me. Here's to competition!