Amazon has dropped the price of its top-selling MP3 tracks to $0.69, according to The Los Angeles Times. That's a 20-cent drop from its previous $0.89 price. The move by the internet retail giant is seen as an attempt to knock Apple from its perch as the top distributor of music in the world. Currently, Apple's iTunes store has a 70 percent market share, while Amazon is a distant second at 10 percent.
The LA Times article also highlights some facts about the effect of price changes to music in the iTunes store since last year. In 2010 Apple raised the prices for most new songs in the iTunes store to $1.29, up from $0.99. However, that price increase slowed music sales growth considerably.
In 2009 when the average music track cost $0.99, digital music sales grew 8 percent in one year. After the raise to $1.29 per track, digital music sales only grew a meager 1 percent in 2010. Of course, Apple's not to blame for the price rise; it's the music studios who insisted on a higher per-track average price.
It's unclear who is eating the cost of Amazon's price reduction, but an NPD Group analyst questioned whether a $0.69 price for hot songs will actually increase Amazon's market share, or if the price will just create a platform for "opportunistic cherry pickers."