Comments on: Shock! Disbelief! Week 4: Big Music Price Hike STILL Makes Tunes Less Popular!

By: Andy

Andy — Thu, 07 May 2009 21:00:08 +0000

@Pinny -- You tell them, mr. microeconmics. Let's talk about profit margins. Hm...Apple doesn't make $0.99 for a song, because their profit margin was around 30% at $0.99, meaning their cost per song is around 70 cents.

(.99 - .70) * 1000 = $290 (1.29 - .70) * 600 = $354

An that's at 60% sales, not 65% as the article mentions.

I assure you, with $29 billion in cash on hand, Apple knows something about economics. Or do you think they just won a $100 million lottery...290 times!!!?

Of course, you would have known this, if you had actually read the article.

"But since $1.29 songs have a higher margin, the hike has raised more income than if the price had remained at 99 cents. How much? Billboard reckons $14,000 a week net."

By: Rene Ritchie

Rene Ritchie — Thu, 07 May 2009 02:46:18 +0000

@Pinny: hasn’t big music, indeed all of big media, proven over and over again that they have no concept of economics other than cut-off-your-nose-to-spite-your-face curves?

By: Pinny

Pinny — Thu, 07 May 2009 01:49:36 +0000

Anyone who took even a basic microeconomics course knows that wants (as opposed to needs) usually have a fairly elastic demand curve. In English, demand is fairly sensitive to price. Economic theory would predict then, that a lower price would maximize profit. Indeed this is easy to illustrate: 1000 songs at .99 = $990, whereas 600 songs at 1.29 = $774, or a net loss. This price sensitivity is especially true in a recession. Makes you wonder what the heck Big Music was thinking. If anything, they should have lowered prices. ie: 1200 songs @ .89 = $1068 Do they not have any economists on staff?

By: Ana

Ana — Wed, 06 May 2009 23:47:59 +0000

@Forrest Gump

ick don’t use Limewire.

Find a reputable BitTorrent site A+ quality and you’re almost guaranteed to find some unreleased/rare tracks by your favorite artist

By: frog

frog — Wed, 06 May 2009 23:15:07 +0000

We saw a $0.60 price hike here, I’ve not bought any of the more expensive songs – and don’t plan to. It makes the “free” alternatives more attractive.

By: Matt Sawyers

Matt Sawyers — Wed, 06 May 2009 21:29:29 +0000

I must say, I don’t buy my music through iTunes anymore. I am not sure why, but the $0.29 price hike has made me think differently. Now I stick to free music & radio show podcasts, like Above & Beyond and TWIT.

By: sting7k

sting7k — Wed, 06 May 2009 21:20:55 +0000

I don't really get why 99 cent songs saw the decline. I know many people who have jumped into buying from iTunes only now that it is DRM free.

I'm having a hard time finding those 69 cent songs though.

By: Steve

Steve — Wed, 06 May 2009 21:12:47 +0000

Lowlifes.

By: Neil

Neil — Wed, 06 May 2009 21:11:44 +0000

I know it’s only .30c extra, but its the principle of it…it just feels like a money grab so I don’t buy them. Still a lot of the time I buy the physical CD with little regard for how much less or more I’m paying vs getting them on iTunes….so what the hell do I know.

By: Sam

Sam — Wed, 06 May 2009 21:00:20 +0000

For some reason I can NOT bring myself to buy a song that’s priced at $1.29… I will download it on aimini.net for free and fix the tags myself before I pay $1.29 for it on iTunes.