Music download prices to rise

Big labels upsetting the Apple cart...

By John Oates, 28th February 2005

Regcast training : Hyper-V 3.0, VM high availability and disaster recovery

The market for downloaded music is strong enough to take a price rise, according to the major music labels.

Several big labels are in talks with online music retailers to get them to increase prices,according to the FT. The labels are looking to increase the wholesale prices shops pay for tracks. Sites in the US typically sell tracks for 99 cents each. The wholesale price is currently 65 cents per track, according to the FT.

Universal and Sony BMG are less keen to put prices up. EMI and Time Warner refused to comment on the FT story. Some observers are concerned that increasing prices would push people back to peer-to-peer networks and dodgy copies of songs.

The music industry is apparently unhappy with Apple's increasing share of the market - the firm sells about 65 per cent of songs sold online. The arrival of cheaper iPods is likely to give the firm an even larger share of the market. Apple refused to comment on the FT's story but Steve Jobs is reportedly deeply unhappy with the attempted price hike.

One suggestion is that labels want to introduce variable pricing - so they can charge more for top selling tracks.

Meanwhile it was confirmed on Friday that the European Commission is investigating allegations that British consumers are being ripped off by Apple's iTunes service because it charges more for downloads from the UK site and does not allow punters to buy tracks from other country's iTunes sites. ®