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You can taste the reluctance in this move. Apple (NSDQ: AAPL) just announced it will lower UK iTunes Store prices (£0.79 per track) by the summer to harmonise rates with those in the Eurozone (0.99 euros, or £0.67).
But it’s not doing so without protest – this explanation from the emailed announcement: “Apple currently must pay some record labels more to distribute their music in the UK than it pays them to distribute the same music elsewhere in Europe.” So look out, labels: “Apple will reconsider its continuing relationship in the UK with any record label that does not lower its wholesale prices in the UK to the pan-European level within six months.” US track prices are $0.99 (£0.50).
Apple had passed the buck to the labels throughout this process, protesting in hearings that the price differential was not its fault but that of its suppliers. For Apple itself, though, Steve Jobs in September complained it is “more expensive to do business in the UK” than the US – the rationale for a higher iPhone price tag. Apple’s threat to axe labels that don’t lower prices cold affect indies in particular, who may be less able to withstand lowering their fees. A rocky road ahead for iTunes.
Jobs today said this is “an important step towards a pan-European marketplace for music