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Friday, April 17, 2009

Multi-tiered Pricing Backfires

It seems that raising prices on most digital music services to $1.29 may have backfired.

After some research, it appears that tracks with a retail price of $1.29 on the Billboard Hot 100 chart dropped an average of 5 chart positions, while tracks that maintained their $0.99 standard rate actually moved up 2 chart positions.

Virtually the entire world thought that raising prices would be a bad idea during prosperous times, and it's an even worse idea now. The major labels have been demanding this for a long time, and now that they've gotten it, we'll see how long before some common sense ensues.

It's going to be interesting to track this story in the coming weeks. Wanna bet that most tracks fall back to $0.99?

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