Amazon MP3, Wal-Mart and Rhapsody just made buying music more confusing following iTunes' lead

With the major labels cajoling Apple into upping the cost of the most popular tracks on iTunes, I wondered how long it would take other music download stores to follow suit. Not long it seems – less than a day in fact – with paidContent and Ars Technica reporting that Amazon, Wal-Mart, Lala and Rhapsody have followed Apple’s lead and introduced ‘variable pricing’.

See also: iTunes variable pricing has nothing to do with “supply and demand”, just record label greed and stupidity

Of course, none of this down to the stores in question. The major labels set wholesale prices for tracks, and each download store then follows suit, give and take varying margins and the odd, possibly loss making, promotion here and there. Some might argue that ‘variable pricing’ alone isn’t necessarily a bad thing, although it does sacrifice the simple buying experience that Apple first introduced with its 99c per track rigid pricing structure on iTunes. What’s certainly short sighted is to use ‘variable pricing’ as an excuse to raise the upper limit of price per track, especially in a time of recession and when less and less people still pay for music anyway.

There’s also a complete inconsistency in pricing across each store on a track by track basis. It’s not even as simple as paying more for the most popular tracks. For example, Amazon is cheaper than iTunes on some top 40 tracks and vise versa. As paidContent notes: “comparing like with like can be difficult”.

Update: ComputerWorld’s Seth Weintraub is reporting that the major labels are giving Amazon more favorable terms over Apple– cheaper wholesale prices — which would be consistent with past behavior.

Sources at Apple tell me that Apple is getting different prices than Amazon from the recording idustry.   The record companies are, and have been for awhile, favoring Amazon.  In fact, Amazon is selling songs for less than the price that Apple pays for them in some cases.

The motive: The majors are determined to weaken Apple’s power in the music industry, and with some success, punishing them for selling all those damn iPods.

, , , , ,

last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

One Response to “Amazon MP3, Wal-Mart and Rhapsody just made buying music more confusing following iTunes' lead”

  1. People complain about a little price hike. It's not fun for anyone, fine, but does anyone remember when online downloads weren't around? You'd buy a full album for $20 because you liked 1 song. You might find there were 3-4 good songs on some albums but a lot of times, only that one radio hit did it for you so you went and spent $20 a song. Now iTunes and all the rest follow and run a variable pricing model on songs which goes as high as $1.29 per tune and everyone is freaking out. Recession? It's $1.29 for a song you get to keep, make copies of, burn, so practically whatever with. Online music downloads are still a fairly new product so you have to give it some time where a lot of changes will take place but still, I think people should relax cause online music download just made buying music so much more affordable, even if iTunes ever decided to go as high as $3 per song, though I could see at some point I'd jump in on the arguing, but we're far from that point.

Leave a Reply