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Apple Wins MP3 Pricing Negotiations

While the music companies have been pushing for variable pricing to increase their revenue, Apple has been able to sign agreements that keep all downloads at a flat rate of $.99 per song.

Apple much prefers the simplicity of all songs being sold for the same price. It makes it simpler on them, and since they make the bulk of their revenue by selling the MP3 player, they would prefer to make the downlod sales as simple as humanly possible.

Steve Jobs has publicly labelled the music companies as greedy for thrying to force variable pricing on the consumer. As much as I agree wth Apple holding th line on prices, I am sure that it is not out of any real concern for the consumer, beyond what will make them buy more ipod’s.

In any case, $.99 downloads from iTunes is a simple, affordable price that I am willing to pay. Apple clearly had the upper hand in the negotiations, I just hope they can keep the price at such a reasonable level for years to come.

Financial Times

Posted by Jeff

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