Dancin' on the Margin
Contra Peter, I think iTunes’ price tiering is blissfully intuitive.
Imagine that Apple’s practically saturated the mp3 market by this point, and therefore is depending less on new iTunes customers than new business from old customers. It’s fair to assume that shortly after joining, a customer ensured that all of his “Must-Haves” were in his iTunes library. So new acquisitions will either be a) new music; b) old music he just got turned on to or c) just-remembered rarities and impulse buys. (The radio industry calls these “oh wows.”)
I think the “ease of transaction” metric makes more sense for c) than b). (Let’s face it, a lot of b) consists of music that the customer’s Cooler Friend just turned him on to, but that the Cooler Friend, her friends, and the kind of record store she frequents have been hip to for years. So it’ll be much more readily available in the online marketplace.) But with c), customers are more likely to be dissuaded by cost than the other two categories, because the song isn’t considered a “must-have.” This is especially true in the current economy, when people like to think they’re making fiscally responsible choices even when they’re drowning in credit-card debt. Marking down the songs most likely to produce a “but I really shouldn’t spend 99 cents” reaction sounds like a really good move on iTunes’ part.
It’s also the same model for movies. $10 first run theater, $5 cheap movie theater month later, $4 rental 6 months later. And for most media that has a cultural lifespan.
Peter’s point about saturation is important if saturation is a substitute for owning the track, though I don’t think it is; the opposite in fact.
As you allude to with B, I think that kind of finding old albums through social circles (and the subsequent conditioning/connoisseurship) should push for greater discounts on album purchases. Especially with collections. I still remember getting Rhino’s No Thanks! from a friend – I immediately turned around and bought a bunch of additional stuff I wouldn’t have otherwise.
— Rortybomb · Apr 9, 12:31 AM · #
OK, I guess I just saw the “pay less for older tracks” thing was just a transparent attempt to offset the bad publicity of raising prices….
— Freddie · Apr 9, 01:42 AM · #
You might be right. But if so, why? Especially now, when hot singles are all available for free on MySpace, HypeMachine, YouTube, etc. — always as streaming files, and often in reasonable quality MP3 format. Why should the easiest-to-obtain tracks also be subject to the highest demand (and therefore highest prices)? Are people that computer illiterate? Is there some sort of residual collector’s wanna-own-it magic about firing up iTunes and pressing the download button? I’ll shell out for hard-to-find stuff, but radio singles are handed out like candy at a Christmas parade. Strikes me as sort of odd that they’d also be priced higher.
— Peter Suderman · Apr 9, 02:24 AM · #
I think you guys are a little bit too credulous. Google around and see about how many people have tried in vain to find 69 cent tracks. They lowered the prices only on stuff they genuinely don’t believe they’ll sell; everything else has stayed the same or gotten more expensive. “Variable pricing” is just public relations for a price increase.
— Freddie · Apr 9, 12:50 PM · #