Probe may delay change in digital music prices

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Not sure about this...

"Apple's iPod profits allow the company to retain the $0.99 fixed price, and competitors have to follow Apple's lead."

How is this so? Walmart.com has most songs at $0.88 per track, but some variably priced as well. And they also sell some full albums at various whole-album rates that come out to cheaper per-track rates than if bought as singles. This is a clear example of non-collusion...in fact an indication of competition since Walmart is obviously trying to price cheaper than the market leader in order to gain share.

Besides all this, I don't see variable pricing as a sign that collusion isn't going on, or lack of variable pricing as a sign that it is. I think the online retailers probably rationalize that having one price per track is just simpler and makes more sense to the consumer than seeing price fluctuations as songs wax and wane in popularity. Imagine the potential for customer ire as a song that a friend got for $0.50 one week, rises to $0.85 after a week of strong sales, just as you were about to get it based on your friend's recommendation. You're going to feel used when you see the new price. Clearly the digital companies all see the complexity of this model, and its potential for being a customer relations fiasco. Its just simpler to stay with a flat fee per track. Widespread commonsense doesn't spell collusion. We should be glad to have pervasive commonsense for a change. The labels sure don't have any. Good on the digital sellers for having some.

Posted by: techboy_z   Posted on: 01/04/06 You are currently: a Guest | Members login | Terms of Use

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