October 17, 2005

As soon as the word "greedy" was uttered by Steve Jobs in reference to major labels' interest in varirable download prices the topic has been a heavily debated topic. It's been good water coolfer talk in the music business, and online trade mags and their pundits have used it to again show their distaste for major labels and their tactics.

Well get ready for more. Yesterday an article at The Guardian revealed that Universal Records " is likely to introduce variable wholesale prices for music downloads in 2006." The Guardian obtained a leaked copy of a contract between Universal and a smaller UK online retailer that details a three-tiered pricing structure that would "drastically" increase the wholesale cost of some downloads and decrease the wholesale cost of others.

What Universal wants, Universal often gets. Its market share gives it the leverage and confidence to makes moves -- popular or not. Given the fact that the other three majors have not followed Universal Music Group in cutting list prices and revamping how marketing money is used, a unilateral price increase by Universal doesn't mean others will follow and adopt their own tiered pricing structure.

Universal Music Group currently has six of U.S. iTunes' top ten singles downloads and five of its ten top albums.

AddThis Social Bookmark Button
Posted by Glenn at 1:28 AM | | | Digital Music | Music Industry | Universal Music Group