Apple to introduce tiered pricing on iTunes starting on April 7

After years of waiting, the record labels will finally see tiered pricing introduced on iTunes starting on April 7th

Ever since the iTunes Music Store launched in 2003, one thing customers could always rely on was that songs were always going to cost 99 cents and not a penny more. Up until recently, another thing customers always associated with the iTunes Store was that songs purchased from Apple were wrapped in DRM, and would only be playable on iPod MP3 players. As it turns out, in order to get rid of the DRM, Apple had to implement variable pricing into the iTunes Store. In other words, 99 cent songs across the board will soon be a thing of the past. Phil Schiller first announced at this years Macworld that Apple would eventually introduce tiered pricing into iTunes. As part of the pricing change, record labels would now have the option to choose between 3 price points when deciding how much to sell a song for on iTunes. At the low end, less popular songs could be priced at 69 cents, while more popular songs could now be sold for as much as $1.29. Of course, record labels who are happy with the status-quo can continue selling songs for 99 cents a pop. Record labels have been fighting for variable pricing for years now, but Apple was able to leverage the popularity of iTunes into a strong negotiating position, and it steadfastly refused to even experiment with tiered pricing. This stubbornness on the part of Apple led to a number of well-publicized spats with music labels who felt that Apple was getting too good of a bargain at their expense. When details of the new pricing arrangement was first announced, there was no definite date for when the changes would take effect. All Apple revealed was that it would be sometime in April, and now, the Los Angeles Times is reporting that D-Day for music lovers is April 7. The majority of songs in the iTunes top 100 chart are from 2008 and 2009, and it remains to be seen just how widespread the $1.29 price-point becomes for those songs. The difference in price is only 30 cents, but there was an undoubted psychological attraction to the 99 cent sale price. 99 cents was conducive to impulse purchases, and a 30 cent price hike, though seemingly insignificant, might cause a lot of users to think twice before clicking the "buy now" button. At the same time, if record labels get overzealous in their efforts to milk every last cent out of the most popular songs, they'll undoubtedly notice a decrease in song purchases, thereby forcing them to revert back to the 99 cent/song model for certain songs. In other words, there's no reason to get all bent out of shape about the price increase because eventually the market will correct itself. 99 cents a song was one of the key selling points of iTunes ever since it debuted nearly 6 years ago. To be honest, it's not a surprise that record labels are finally going to get to experiment with different pricing schemes. What's really surprising is that Apple was able to hold them off for as long as it did. Like this post? Check out these others from iOnApple

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