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Apple’s iTunes will increase the price of hit singles and in-demand tracks to $1.29 on April 7th. The new variable pricing method will also reduce the price of other songs. Label executives contend the new pricing will allow them to offer packaged downloads of songs that might entice consumers to spend more on music. (Los Angeles Times)

Critics say:

“Some music industry veterans are criticizing the 30% hike price, saying the timing is tone deaf because it comes in the midst of a recession and at a time when spending for online music appears to have reached a plateau.”

“This will be a PR nightmare,” predicted former EMI Music executive Ted Cohen, who is managing partner of digital media consulting firm TAG Strategic. “It is for the music industry what the AIG bonuses are for the insurance industry.”

“Wouldn’t it make sense to try to price it cheaper instead of squeezing the handful of people who are still willing to pay for music?” he said.

Supporters say:

“If you’re not drawing new people and your spending isn’t growing, it’s a natural part of the product life cycle” to raise prices, said Russ Crupnick, a senior analyst for NPD Group. Crupnick said he doubted a 30-cent price increase would prevent iTunes customers from buying a hot new release from artists like Kelly Clarkson, Flo Rida or Lady Gaga. He noted that offering a discounted second track packaged with a premium priced song from the same artist could boost sales.

The Bottom Line: In the hey day, artists successfully delivered an entire package what we called an album. Today, the act thrives on a single and usually the single alone. With the help of technology and the lack of an album – consumers have trained themselves to listen and purchase singles only, hence, it’s natural progression to increase the worth of the single.

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