WTF? Price Hikes? [8:19 am]
So, is this an indication that the industry expects to win Grokster, or is this an effort to make Grokster look like more of a threat by killing the nascent eTailing business? Or is this just foolish, shortsighted greed? Music download prices to rise
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.
Later: A link to the FT article - Top music labels try to raise prices for downloads [pdf]