I know that Apple has been expending a lot of hot air telling anyone who will listen that the new iTunes pricing regime is a good thing for consumers. I know that it reckons that for every song which is ramped up to the new 99p (here in the UK) price it will drop another 10 songs down to the 59p bottom dollar pricing. Trouble is, I also know that music download market runner-up Amazon has taken advantage of consumer confusion surrounding the price changes by jumping in with 100+ songs going for just 29p a pop.
Importantly, Amazon has opted to drop the price on big selling tracks such as Poker Face by Lady GaGa while Apple has the same song, which currently tops the UK charts, at the new top tier price of 99p. Now given a difference of 70p I wonder why anyone would, if aware of the Amazon offer of course, still go ahead with the iTunes purchase.
I can only assume that Apple is hoping that ignorance will be bliss and that the majority of the iPod owning masses will simply click and buy without being aware that there is an alternative.
It is a risky business, especially in times of economic woe, to hope that your customers simply do not notice that you have hiked your prices. An even riskier business when the alternatives include not just Amazon with lower prices for downloading tracks, but also completely different models for listening to music. I'm thinking of services such as Spotify here in the UK which allows users to listen to streaming music totally free of charge in return for pushing the odd advert in front of them. That's not only totally free, but also totally legal and providing a music choice that includes the usual top chart suspects but also a huge swathe of other music covering all genres and decades.
Of course, Apple does have something of a hard hand to beat in this particular game of musical poker: a 90 percent share of the UK digital music sales market. But we all know how markets can change, and the raising of many prices during a time of financial hardship for many of its customers could be the catalyst for such a change.
Just for the record, if you will excuse the pun, I went hunting around the UK iTunes store and while I would admit that much of the top 50 was still selling for the 'old' price of 79p per song, and some was up at the 99p per song mark, I could find nothing selling for the much publicised lower price of 59p.
Maybe that will change over time as consumers stop buying 99p tracks and instead start searching specifically for the bargain basement stuff instead? Or maybe Amazon will manage to do what they have done with the eBook market via the Kindle and manage to turn things around in the music download business as well.
One thing is for sure, and that is the new pricing structure seems to fly in the face of earlier Apple promises that it would rather close the iTunes Store than be forced into hiking prices to cover increased royalty demands from record labels and publishers.
