iTunes Variable Pricing Scheme Caused Sales To Decline

Last week’s price hike at iTunes store has reportedly affected the unit sales of some of its most popular tracks, but the digital download service eventually managed to register small growth in its overall revenues.

It has been reported that the songs now costing $1.29, up from $0.99, downloaded 12.5 percent fewer units than that of the previous week, whereas music tracks whose prices remained unchanged downloaded 10 percent more than a week earlier, according to a study by Billboard.

Billboard also mentioned how sales of iTunes’ top 100 tracks were affected by such a notable price hike, as 33 songs in the top 100 songs witnessed increase in their price labels.

When taken together, the top 100 songs saw only a marginal decline in unit sales to 4.62 million units from 4.64 million units last week, but with most of those songs priced 30 percent higher, iTunes actually saw an overall increase in its revenues; however, Apple didn’t provide any information about the exact revenue figures of iTunes.

Many observed Apple’s new move to higher price tags for the highly popular music tracks as a way to lure users to purchase more albums rather than single songs, but it’s still not clear that the move has really increased the sales of albums.

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Our Comments

It is too early to find out whether Apple's bet has been a good one. Apple revenues actually went up while the amount of songs sold declined, which in theory is a good thing. As mentioned in the article, the price rise may have some impact on the number of albums being sold online.

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