James Delahunty
28 Feb 2005 6:44
The market for online legal music downloads is strong enough to take a price hike according to major record labels. Several major record labels are apparently in talks with online music stores to get them to increase music download prices, according to the FT. In the United States, online stores typical sell music downloads for about 99c per track. The wholesale cost of these tracks (that the shops pay) is about 65c.
The labels want the wholesale cost of the music to increase. Universal and Sony BMG are not so keen to put prices up and EMI and Time Warner wouldn't comment on the FT story. Some people are concerned that any sort of price hike on legal music downloads may push consumers back to P2P networks where they can find music for free that contains no DRM protection and usually is in the MP3 format.
Also the music industry is getting unhappy with Apple's dominance of the market apparently. Apple currently sells about 65% of all legal music downloads and now with cheaper iPods available, that figure may increase. Apple wouldn't comment on the FT story but apparently Steve Jobs is very unhappy about any talks concerning price hikes.
Source:
The Register