Music Sales Slowing Due to iTunes Price Increase

Music labels are seeing digital sales slow down following a demanded price increase they convinced Apple to agree to.

In April, iTunes began offering music at a "variable pricing" scheme, which allowed labels to increase pricing from 99 cents a song to $1.29.


MediaMemo reports that this morning Warner Music Group said that it has seen unit sales growth at Apple's iTunes decelerate since the price increase: Industry-wide, year-over-year "digital track equivalent album unit growth" was at 5 percent in the December quarter, down sequentially from 10 percent in the September quarter and 11 percent in the June quarter.

In the last quarter, digital revenue at WMG was up 8 percent compared to the previous year; a year earlier that number was 20 percent.

Warner CEO Edgar Bronfman Jr. argued that the pricing change has been "net positive" for Warner; however, he did suggest that in hindsight, perhaps it wasn't a great idea to raise prices 30 percent during a recession.