Apple Inc and major music labels are betting that the launch of three-tier pricing at the iTunes Music Store will boost music sales with a new mix of song-based packages and give consumers more options.
Apple will announce its new three-tier price points at 69 cents, 99 cents and $1.29 on Tuesday, according to several people familiar with its plans. Since opening in 2003 all songs in the iTunes store have been priced at 99 cents.
The previous 'one price fits all' strategy has long caused friction between Apple and the music labels, who argued that songs should be priced differently to reflect their perceived value by consumers.
The labels will finally get their wish.
While the majority of songs will still be sold at 99 cents, a certain number of new hit songs will now be raised to $1.29. Many older catalog songs will now go for 69 cents.
Perhaps anticipating a consumer backlash against price increases executives, who spoke to Reuters on background ahead of the launch, pointed out that for every one song they raise to $1.29 they will be reducing 10 songs to 69 cents.
Apple will announce its new three-tier price points at 69 cents, 99 cents and $1.29 on Tuesday, according to several people familiar with its plans. Since opening in 2003 all songs in the iTunes store have been priced at 99 cents.
The previous 'one price fits all' strategy has long caused friction between Apple and the music labels, who argued that songs should be priced differently to reflect their perceived value by consumers.
The labels will finally get their wish.
While the majority of songs will still be sold at 99 cents, a certain number of new hit songs will now be raised to $1.29. Many older catalog songs will now go for 69 cents.
Perhaps anticipating a consumer backlash against price increases executives, who spoke to Reuters on background ahead of the launch, pointed out that for every one song they raise to $1.29 they will be reducing 10 songs to 69 cents.
