EMI: Apple Will Change iTMS Pricing Structure


EMI chief Alan Levy, cited in Forbes, claims Apple will introduce multiple price points for iTMS music. Should this be the case, it would mark the end of the easy-to-swallow 99ยข-per-track rationale upon which the iTMS has been based.

Apple CEO Steve Jobs has argued that this is the model that benefits both consumers and the music industry best, and the iCEO has previously resisted pressure from the record labels to raises prices. Studies suggest that, although Apple makes an operating profit with the iTMS, labels make more money per track or album than they do selling the CD.

A tiered pricing system could mean cheaper older tracks - whose bills have been paid for time and again - while newer tracks and albums would cost more. This would be closer to Amazon's model, where older CDs are often steeply discounted.

As Apple has not introduced tiered pricing, industry giants, such as Sony-BMG and Bertelsmann, have refused to play ball; Sony, for example, hasn't signed up for the Japanese or Australian versions of the iTMS.

Analysis: The real news here is from EMI itself: its digital sales in the last six months have more than doubled - doubled. If that doesn't tell the record industry which way the market's going, nothing will.