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Apple's iTunes pricing to stay at 99 cents

Marc Perton
04.21.06
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Apple Computer's Steve Jobs has apparently won his long-running battle with the record industry over the pricing of songs in the iTunes Music Store. Jobs has long insisted that the store's 99-cents-per-song price point should stay in place, while record companies had argued for more flexible pricing, with newer songs going for a higher price, and catalog material selling for less. The record companies had also pushed for a subscription option similar to that followed by most other online music stores. Now, according to The New York Post, the record companies have largely thrown in the towel, and will allow Apple to keep pricing flat. The victory is, however, somewhat Pyrrhic for Apple; the company makes very little money (proportionately) from iTMS, and uses the store largely as a way to lure customers into buying iPods and lock them into its FairPlay DRM, which we all know works only with one audio player. (Why do you think the French are giving them such a hard time?) Keeping pricing simple is part of Jobs' strategy to avoid losing customers to competing platforms, which have access to music stores that offer unlimited download subscription packages for as little as $8 per month. Level pricing may help stanch defections -- but it's not likely to produce any increased revenue for Apple, which is apparently just how they like it.

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