In re: Price hike for iTunes?

NYTimes today had an article how when the current contracts with record labels expires with Apple, they will look to introduce variable pricing, something Apple has resisted so far. The pricing would raise the price of popular songs likely to $1.49. Right now iTunes sales consist of 75% of the digital online market, however this could change as record companies have begun to want Apple to allow other devices to use music purchased on iTunes and iTunes/iPods to play music purchased on competing services. The record companies (who get around 70 cents of the 99 cents a song) complain that Apple wants to make money off their iPods (true) and doesn't mind selling the songs for such a low price (a reverse Gillete model, giving away blades, selling expensive razors) In anycase we must remember that before iTunes there wasn't any viable scheme for making money on the internet and all the talk was about P2P networks stealing from the record companies. Personally I feel that it might be a bit too soon to run away from the model of fixed prices that has worked so well, I personally am already used to a model of buying songs online without thinking twice about cost as you know what it is and trying to squeeze more profits out of the online market right now might just be pushing their luck.


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