As you may have heard already, the iTunes music store, under pressure from the recording industry, is abandoning its $0.99/track sales model. Popular hits will carry an additional $0.30 surcharge. We're also told a $0.69 price point for 'catalog music' is available, but as gizmodo reports, these can be difficult to find currently.
Major label owners like Vivendi's Universal Music Group, Sony Music, Warner Music Group and EMI Music say they can make money with more flexible prices and possibly help make music retail a profitable enterprise again.
So you're telling me you can make more money if you charge higher prices? No wai!
The really interesting part of the press release is the following quote
Industry estimates show that 10 to 15 percent of albums account for 90 percent of all sales, according to Digonex, a dynamic pricing software company which has worked with major music companies including Warner Music.
Older, catalog tracks get the lower price point, and current hits get the more expensive price point, presumably where 90 percent of all sales are. From this we can infer that nearly all music sales are driven almost entirely by whatever is popular at that moment, like hair styles, clothing, and what color and model iPod you're using. Whatever was popular last year, isn't desirable anymore. In other words, desirability (and, in turn, pricing) is based on fashion, not quality.
