Online music: what’s going on?

cnet, of all places, has what looks to be a well-researched story about online music services in general and iTunes in particular. What’s most stunning about the article is its confirmation that record labels are already experimenting with price increases:

Label and Web company executives said the price increases reflect an experimentation with tiered pricing that mimics the way retail album prices fluctuate according to title, and over time. Under this model, pre-release singles or very popular artists might cost $1.50 or more per song, average tracks might stay at 99 cents, and back catalog and other promotional songs or albums could drop even lower, for example.

While this all sounds like the record industry has a coherent plan with pricing of online music, how does it explain the fact that Pink Floyd’s Dark Side of the Moon remains stubbornly priced at $16.99 online, when the physical CD can be had for ten bucks? If online music is going to follow the model of the pricing of physical records, then why should it ever be more expensive? After all, there’s no physical production or distribution costs.

This lack of a coherent strategy in the recording industry bodes poorly for online music. With so many free alternatives available, if paid downloads get a reputation for inconsistent pricing, it will be difficult for the recording industry to win those hearts and minds back.

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