SEATTLE (Hypebot) – Yesterday (April 7th) iTunes dropped all remaining DRM and launched variable pricing. As predicted, the major labels and some major distributed indies upped prices on hit product to $1.29.
EMI Holds At 99 Cents
EMI appears to be the one major label not jumping on the price increase bandwagon. A Wednesday morning survey of iTunes showed hit product by Coldplay and other EMI artists still at $.99. During the original transition to DRM-free, first mover EMI had been criticized for demanding a $1.29 price point. This time EMI may be waiting to gauge consumer reaction before raising prices.
Amazon & Wal-Mart Hold Down Prices
The price of hit product from Sony, Universal and WMG also rose to $1.29 on Napster and Rhapsody yesterday. But while they increased prices slightly, Amazon and Walmart.com thus far kept them well below $1.29 at $.99 and $.94 cents respectably. All download stores pay the same wholesale price; so presumably Amazon and Wal-Mart are accepting much slimmer margins to offer lower prices than iTunes.
Sony Forces $1.29 On All Stores
The glaring exception is hit product from Sony which is priced at $1.29 an all retailers including Amazon and Wal-Mart. Unlike all other labels and distributors, Sony offers its music to all download stores using the so-called agency model which enables the label group to control the final sale price.
