In January, Brad Stone grandly announced:
Apple said it ... will move away from its insistence on pricing songs at 99 cents.
Many were elated, but I was skeptical:
Steve Jobs may be underweight, but he knows how to run a business. This new agreement is a margin-positive change for Apple. In other words, under the new plan, customers will be paying more for less total product.
And now Paul Bonanos reports:
For Apple and other retailers testing variable pricing in the digital music marketplace, the early returns suggest that their six-month-long experiment is succeeding -- and generating more revenue for labels and rights holders as well.
If the average price of a top-200 hit is therefore about $1.25, and track sales among the top 200 have fallen by 6 percent, sales revenue from hit songs would still be up by at least 18 percent compared with an all 99-cent store.
If you think that things couldn't get any worse, wait till the 2020s.