Apple Renews Flat-Rate iTunes Music Contracts

Apple has won the battle with the record-labels over “variable pricing”, which would have seen the cost of a lot of songs rise. Apple has announced the price will remain a flat rate of 99c in the US, 79p in the UK and whatever it is everywhere else. “Of the world’s biggest music companies — Universal, Sony BMG, EMI and Warner Music — all but Universal had pushed for variable pricing to maximize revenue from hot artists…But in the end Apple had more negotiating power because of the dominance of its intertwined iPod player and iTunes service.” It’s got 80% of the US market.
Of course, this has a pretty significant impact on mobile music. Carriers charge a pretty hefty premium for mobile music, mitigated by dual-downloads and — with a couple of operators offering 99c downloads on the computer. And Amp’d, of course, which is selling songs at a loss to match the iTunes price. The best hope the carriers had for an upswing in the usage of their mobile services was if the labels forced Apple to put the prices up so the difference was less stark. Since this hasn’t happened expect a lot more pre-releases and packages — they’ll still want to charge more, but now they’ll have to give a reason other than simple mobility to do so.

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