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Apple wins right to retain fixed-price downloads

Major labels drop insistence on variable pricing

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Apple has apparently succeeded in persuading the world's major record labels to re-license their content for sale on its iTunes Music Store (ITMS) for a flat-rate 99 cents - 79 pence in the UK - per track. To date, label executives have been keen to stress their demand for variable pricing - higher prices for new songs, lower prices for older material - but they've clearly been willing to let it pass this time.

The deal follows Apple's latest round of licensing negotiations with the world's biggest recorded-music companies, Universal, Sony BMG, EMI and Warner. Apple has insisted that its pricing model is the best way to drive forward the nascent digital music download market because it's simple and easy for consumers to understand. ITMS does support variable pricing for albums.

Of course, the labels may have ultimately felt Apple holds the all the cards. ITMS accounts for around 80 per cent of digital music download sales, largely thanks to the popularity of the iPod, and the labels are unlikely to want to push their biggest download seller too far. That said, downloads still account for a tiny proportion of overall music sales. ®

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