It was a sad day this past Tuesday for almost everyone except the record labels when Apple (s aapl) put in place the variable pricing scheme they’ve been promising since announcing their entire library would be going DRM-free. At the very least, many thought they could take refuge in the safety and comfort of iTunes rivals Amazon (s amzn) and Wal-Mart (s wmt), both of whom also run digital music sales outlets, and both of whom had suddenly become a much better value proposition in the face of the changes.
Sadly, no e-tailer turned out to be safe. Both Amazon and Wal-Mart introduced their own variable pricing schemes shortly after Apple’s went live. This was literally hours after a friend recommended switching to Amazon, since it now presented a better deal. Amazon is now offering some of its best-selling tracks at $1.29, and some at the low end for 79 cents, while the overwhelming bulk of their catalog still goes for 99 cents. True to their lowest price guarantee, Wal-Mart’s standard price point is 94 cents, with some top sellers now going for $1.24, and a few bargains at 64 cents.
The changes across the board signal an industry-wide trend, and show that Apple was not alone in negotiating a new pricing arrangement with the record labels. It’s especially noteworthy that the same tracks don’t necessarily cost the same in each store, with Apple having more songs in the top-tiered price range than either of the other two.
Both Wal-Mart and Amazon had already been selling music DRM-free, suggesting that the recording industry’s goal with dangling the DRM-free carrot in front of Apple was to pave the way for price hikes across the board. Now that that barrier is gone, expect to see digital music prices creep to the point where they more closely resemble what you’d pay at brick-and-mortar stores.