Ever since Amazon began selling digital music and offering lower prices than rival Apple, the suspicion by many iTunes fans is that the music industry was in cahoots with Amazon.
In the comments section of our scoop Monday on Apple's MacWorld announcement that it was doing away with copy-protection software and changing its pricing policy, many iTunes fans asserted the often repeated allegation that the four largest recording companies were giving Amazon a price break.
Not so, according to two music industry insiders with knowledge of the negotiations.
The suspicion has long been that the record labels want to help Amazon's fledgling music service compete against the Apple juggernaut. The labels have hoped that an iTunes alternative would emerge and dilute some of Apple's control over digital music sales. The reality is, say my sources, that Amazon, Wal-Mart and everybody else selling downloads is paying the same wholesale price as Apple.
"As long as a retailer pays the label's price they can sell songs for whatever they want," said one of the sources.
What this means is that Amazon, which offers many songs for 10 cents less than Apple's former standard price of 99 cents, has likely chosen to lose money on music sales, say the sources. It's generally believed that Apple's profit margin is just a few pennies per song.
Amazon's motivation is obvious. The company is battling the country's largest music retailer and the maker of the best selling music player. Amazon needs a competitive advantage.
That's going to be tougher to find now. Apple's announcement Tuesday that it will remove digital rights management from songs and offer more price flexibility, including the slashing of catalog titles or older music to 69 cents, is bad news for competitors--especially Amazon. Amazon representatives did not respond to an interview request.
I've been hard on iTunes recently for failing to provide customers with DRM-free music and over-the-air downloads. But the reasons to shop for music at any other Web store are quickly dwindling.
Amazon launched an MP3 store in September 2007 and tried to play up the fact that fans could get cheaper music at a higher quality and free of DRM?
While iTunes on Tuesday raised the price of hit songs 30 cents to ($1.29), catalog titles were reduced by 30 cents. And there are a lot more songs in the catalog category. Apple can now make the claim that iTunes is cheaper than Amazon on most music.
In the comments section of our scoop Monday on Apple's MacWorld announcement that it was doing away with copy-protection software and changing its pricing policy, many iTunes fans asserted the often repeated allegation that the four largest recording companies were giving Amazon a price break.
Not so, according to two music industry insiders with knowledge of the negotiations.
The suspicion has long been that the record labels want to help Amazon's fledgling music service compete against the Apple juggernaut. The labels have hoped that an iTunes alternative would emerge and dilute some of Apple's control over digital music sales. The reality is, say my sources, that Amazon, Wal-Mart and everybody else selling downloads is paying the same wholesale price as Apple.
"As long as a retailer pays the label's price they can sell songs for whatever they want," said one of the sources.
What this means is that Amazon, which offers many songs for 10 cents less than Apple's former standard price of 99 cents, has likely chosen to lose money on music sales, say the sources. It's generally believed that Apple's profit margin is just a few pennies per song.
Amazon's motivation is obvious. The company is battling the country's largest music retailer and the maker of the best selling music player. Amazon needs a competitive advantage.
That's going to be tougher to find now. Apple's announcement Tuesday that it will remove digital rights management from songs and offer more price flexibility, including the slashing of catalog titles or older music to 69 cents, is bad news for competitors--especially Amazon. Amazon representatives did not respond to an interview request.
I've been hard on iTunes recently for failing to provide customers with DRM-free music and over-the-air downloads. But the reasons to shop for music at any other Web store are quickly dwindling.
Amazon launched an MP3 store in September 2007 and tried to play up the fact that fans could get cheaper music at a higher quality and free of DRM?
While iTunes on Tuesday raised the price of hit songs 30 cents to ($1.29), catalog titles were reduced by 30 cents. And there are a lot more songs in the catalog category. Apple can now make the claim that iTunes is cheaper than Amazon on most music.
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Basically, I think this article is trying to say is that Amazon is selling cheaper music than iTunes, but Amazon is losing money and iTunes has to improvise their policy to reply to their competitors. So as a result, iTunes lowered and highered some prices. Even though this is all interesting and stuff, i bet a normal person is just going to buy music wherever its cheaper and has reasonable quality with its price. =] ..aand do any of them sell Islamic music or Nasheeds? Hmmmm...I wonder......
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