iTunes price hike fallout: labels making less money
According to several recording industry sources, the recent price hikes on iTunes haven't been much of a benefit to the people that wanted them the most - the record labels. Despite their Mr. Crab's like shouts of "Where's me money?!" the increase has had the exact opposite effect.
Digital Music News reports that labels have seen a drop in both sales and profits from iTunes since the new pricing structure went into effect. The 30-cent jump could have yielded more profit even with a small drop in sales. A couple weeks in, and that hasn't happened yet - the reduction in sales has more than neutralized the increased profit margin.
So what happened to all the buyers? Chances are good that they've turned to free alternatives - streaming services like Last.Fm and Blip.Fm, or even (shudder!) more nefarious sources like torrent sites and Limewire.
What will the next step be? Reduced pricing? Possibly. One source stated "various price-points are probably going to be adjusted in an attempt to increase and optimize results."
Results? Gee, thanks. That makes me feel all warm and fuzzy about the monetary support I provide.
[via AfterDawn and Digital Music News]