Wednesday, September 05, 2007
Time for variable pricing?
Is it time for Apple to be more flexible with pricing? iTunes is a household name, so it is obvious they are established. I believe that they should switch their business model the way Amazon has which allows for the market to decide a fair price. Amazon used to ship everything from their warehouses themselves. Now they are just the front end with some controls over how their storefronts act. Market pricing might actually give a boost to smaller labels on iTunes because it would show value relative to the big labels. There is enough competition to let the prices go to where they would be naturally. They may even drop if enough smaller labels gain ground. Apple make the plunge.
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3 comments:
Maybe so, Stitch, but I'm not sure Steve Jobs agrees with you. I just heard today that Apple may be mulling cutting the price of T.V. show downloads to the same price of .99.
I suspect Jobs is still using the same logic - when record companies start upping the price, it doesn't behave very much like a free market because it makes consumers upset, and they turn more to illegal downloading instead of paying the much higher prices. I think the issue may be that there is no "competition" for a song or an album from, say, U2. If a consumer likes U2, they must pay what the big record company is charging - there is no other competing "product" to bring the price down for the song or album you want. Then you get pissed off people who say - let's make this song available to everyone for free! As Jobs said - everyone loses then!
You make a good point. Amazon doesn't have the same kind of competition. If you want to buy an electric drill and Amazon is asking outrageous prices you can't just down load a pirated drill of the internet. At least not yet. I still think that some of the very old, outdated material should be priced in a lower priced tier.
I would definitely be all for that!
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