NY Post: Apple to raise some of the most popular iTunes song prices to $1.25

“Music fans may have to start shelling out more to download some of the most popular songs on Apple’s iTunes digital music service, The Post has learned. The five major record labels have been in negotiations recently with Apple over pricing and other issues associated with the year-old download service, which was launched to great fanfare last April,” Tim Arango reports for The New York Post. “All five of the deals – with Universal, Sony, BMG, EMI and Warner Music – have already been signed, sources say, and the new pricing is already being rolled out for albums.”

“EMI and Sony Music, which this week launched its own download service called Sony Connect, were said to be the most aggressive on pricing. Under the terms of some of the deals, the prices for some of the most popular singles could rise to $1.25, according to sources familiar with the negotiations. Songs have previously been priced at 99 cents across the board,” Arango reports. “However, Apple chief Steve Jobs stuck to his guns on his rule that artists are not allowed to only offer full albums for sale without offering singles. Some companies, especially EMI, had been pushing to allow artists to only sell albums.”

“The prices for albums – most of which have been priced at $9.99 – allow for some releases to be priced higher. For example, “Fly or Die,” the latest album from rock-rap act N.E.R.D., is currently selling for $16.99 on iTunes,” Arango reports. “Spokespersons for the major record companies declined to comment. A spokesperson for iTunes was not available for comment.” Full article here.

On a contradictory note, on April 28, 2004, barely more than a week ago, Steve Jobs said that Apple would continue to focus on the 99-cent per song model and that the vast majority of albums available on iTMS today are $9.99. Jobs sadi that he foresaw album prices going down, not up, over time. More of Jobs’ April 28th comments here.

MacDailyNews Take: Sony has the ability to hit Apple here. Think the same Sony songs will be $1.25 on Sony Connect? Too bad for Sony the cheaper songs will be in the unwanted 8-TRACK, er, ATRAC3 format. Again, iPod is the key – the more Apple sells, the stronger Apple’s position will be on all fronts of the digital music war.

81 Comments

  1. Here we go. At least when they debut Europe iTMS at 99p a song, the disparity with US pricing won’t be as great.

    Are Wal-Mart being forced up too I wonder? Probably not. The record companies are trying to even the balance between WMA and AAC so they can play each off against the other and get the best deal.

  2. I suppose the music companies could be more out of touch…

    What am I saying? No, they couldn’t.

    People are willing to pay for just the music. No physical CD, no warehouseing, no shipping. Prices should be dropping. But no, the labels have to jack up prices until something breaks.

    Apple – Monopolists to the left, Monopolists to the right, stuck in the middle with us.

  3. Am I missing someting? Isn’t it the record companies that set the price of the tracks? Why does the head line make it seem like its Apple’s doing?

  4. The Post has been known to sensationalize stories. Not unlike some websites we know they have also been known to stretch the truth or actually report rumors as fact. Where have we seen that before? Lets wait and see on this whopper.

  5. For example, “Fly or Die,” the latest album from rock-rap act N.E.R.D., is currently selling for $16.99 on iTunes,” Arango reports

    WRONG!!!

    I just bought Fly or Die and it was $13.99, NOT $16.99. And I’ve been eying it since it was released. I never saw it listed for $16.99.

    $1.25 per song? Highly doubtful. But this is the NY Post here. I wouldn’t even consider using that rag to wipe my ass.

  6. why the hell is it only being raised on the most popular music store… damn.. could it be they want leverage..by shooting their own feet..

    cut off the nose to spite the face as it were?

  7. The greed of the music label executives and the RIAA never cease to amaze me. There’s absolutely no legitimate reasons for jacking the prices up, other than the desire to increase their revenue that little bit more with each song sale. As scopi pointed out, there are no overhead costs for the record companies with this model. It could have something to do with playing M$ and Apple off of one another in the end, as Dave H suggests, but the last I had heard, the record labels were even more leary of M$ by their reputation than they were of Apple. What’s that about big sharks fearing even bigger sharks? ” width=”19″ height=”19″ alt=”wink” style=”border:0;” /> At any rate, the record labels should really be investigated for anti-trust violations if they’re collaborating on price fixing, which this story doesn’t say outright but does seem to suggest. If they do jack the price up to $1.25 on some or all of their songs, I’ll go right back to the file sharing networks and other places that one can easily get whatever MP3’s they’re really looking for. Yes, the record companies will break the model they participated in making so successful to begin with if they do this. Which may be what they want with this crack dealer approach to music sales. Feh!

    Bizarro Jeff

  8. More on Fly or Die…..

    All the songs on that album can be bought for 99 cents each – except two. Those two tracks can not be bought individually, they’re only available with the $13.99 album. That’s why I bought the album. I really wanted the two extended tracks Wonderful Place and Chariot of Fire. If you don’t want those two tracks, the remaining 10 songs all combined will cost you……… that’s right, $9.99.

  9. Back in the old days, the 50’s and 60’s, individual 45 rpm records cost 99 cents each. You have an A and a B side (two songs) for that price. With inflation 99 cents is not bad. I only download songs that I like, not entire albums. Most albums contain too many songs that are not very good; only a couple of good ones per album. Album only sales on itms would be bad!

  10. It’s record companies that set the price, kinda. Apple pretty much forced a one-year contract on the Big 5, that they weren’t too pleased with, but they figured Apple would fail were they had failed. Apple’s contract contained a lot that the Big 5 didn’t like, include setting pricing per single at .99, setting base record cost at $9.99, refusing to all album only sales, refusing special promotions initiated by record labels (Apple does do artist based special promos, like the free songs, exclusives, and highlights, but this is more Apple driven, then label driven), refusing to have different levels of DRM per album, label, or artist, etc.

    You only have to take a look at BuyMusic, to see what record labels really wanted (singles were priced between .79-$1.79), DRM was per album, per single, record labels had promotional rights, etc.

    I can imagine that Apple had a hell of a hard time re-negotiating this contract, but I’d also bet that we’ve seen the scope of changes in the contract, at the iTunes Music Store anniversity. The contracts were only for a year, and would have been signed weeks before iTMS debut, but even with a specified start date, say the iTMS debut, the contracts would have expired on the anniversity and new contracts are in place now.

    Besides, this article is from the New York Post, aren’t they the as close to the Examiner as you can get for a daily paper?? A slew of articles have already discussed the fact that record labels want to raise prices on popular singles, and their rumblings about their inabilities to do so. Here’s hoping that Steve stuck to his guns about pricing.

  11. OK, am I the only one annoyed by the flashing marijuana ad? I detest these flashing ads and I don’t see how this content is appropriate here. On top of that, the ad has nothing to do with marijuana, it’s just to get attention.

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