If you’ve been on iTunes this week, you’ll have noticed a few new features (including a new version to download for Mac). Take a look at the Top 100 singles, and you’ll see that a good chunk of them are now $1.29 instead of $0.99. It was inevitable that the record companies would try to push prices up, seeing how well singles are selling these days in the digital format. From today’s Billboard.biz news, here’s a breakdown of how it seems to be going:
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.
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.
So what impact does chart position make on the labels? I’m guessing increased revenue trumps reduced chart position every time. However, the old guard of the business still hangs onto that chart position like a geriatric with the last crab leg at a casino buffet. So this should be interesting…I wouldn’t be surprised to start seeing the old cassette single pricing strategies come back into play. Put a single out, and then when you’ve got the promotion all in place, just drop the price to 99 or even 49 cents, and watch that single shoot to #1. This music business thing is never boring, is it?
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ah yes, the days of the $.49 single. Think they will try and hire Bob next? Seems like they’re taking plays from his book. LOL
iTunes is the devil. I refuse to purchase music from there even if i have to wait longer or miss out on special editions 😦
Thanks for the analysis. I hadn’t noticed the price increase had taken effect. While the manipulation you suggest does seem possible, I think Apple is being pretty conservative. After all, they now offer 2 price points for a track. It’s not like some are $5 and some are $.50–like singles used to be when we had to buy them in the store.
Nice analysis, and yep, “dropping” a single’s price to 0.99 or 0.49, then yep, folks are gonna be all over that like stink on a dog.
Interesting analysis John, but wouldn’t there naturally be a sales decline from Tuesday to Wednesday regardless since there would be more traffic on Tuesday anyway due to it being “New Release Tuesdays”?
Dan, anyone who is taking plays from the Trans World playbook these days should have their heads examined!
Paul, I actually don’t hold the same view. The they’re asking a price that they think the market will bear. The only way the music business is going to say in business is if they can turn a profit, so if people will pay $1.29, so be it. This isn’t like fuel or food…people have a choice.
ww_adh, it seems hit or miss. “The Climb”, which is currently at #2, is at $0.99, so I wonder if some of this isn’t driven by the record companies.
Yuri, agreed. All you have to do is look at Amazon’s top downloads to see that their daily special is usually at the top of the list.
Will-W., agreed with the Tues – Wed decline, but the charting singles should stay pretty much in-line. The demand for a single doesn’t normally spike or decline 20 positions within one day, unless there’s a specific event that triggers it (like the whole Susan Boyle deal with “I Dreamed A Dream”).