“Two days after the Apple iTunes Music Store raised prices on some individual tracks, there was evidence the increases have hurt the sales rankings of songs given the higher $1.29 price,” Glenn Peoples reports for Billboard.
“On Wednesday, one day after the price increase, the iTunes Top 100 chart had 40 songs priced at $1.29 and 60 with the original $0.99 price point. The $1.29 songs lost an average of 5.3 places on the chart while the $0.99 songs gained an average of 2.5 chart positions,” Peoples reports.
“Seven of Wednesday’s $1.29 songs had been priced at $0.99 on Tuesday (there were 33 songs priced at $1.29 on Tuesday morning). Those seven songs lost an average of 1.9 chart positions from Tuesday to Wednesday; one of them gained ground, eight lost position and one remained the same. The remaining 33 songs priced at $1.29, whose prices went unchanged from Tuesday to Wednesday, lost an average of 7.7 chart positions,” Peoples reports.
“The difference in rankings is magnified at higher positions on the chart. A song that drops from #7 to #10, for example, could lose about 4,500 units over two days but gain an incremental $3,600,” Peoples reports. “For a price increase (to $1.29 from $0.99) to result in an equal or greater amount of revenue, unit sales would to drop by no less than 23.3%. On the most recent track download chart, the different between #42 and #45 was only 3.5%. One has to move up to #6 on the chart to get to a difference greater than 23.3%. The difference between the #6 and the #3 chart positions equals a 30% drop in unit sales while the difference between #7 and #4 is a 19% drop in unit sales.”
“This analysis does not take into account sales trends that would have existed with the absence of price changes,” Peoples reports.
Full article here.
MacDailyNews Take: We can just imagine the greedy music label honchos: “That’s okay, the individual product can drop, as long as they don’t drop too much and offset our profits!”
