Download the new Switched app for your iPhone

Skip to Content

Watch Gadling TV's "Travel Talk" and get all the latest travel news!
AOL Tech

Filed under: iTunes, Music

Act surprised: Higher iTunes prices mean slower sales

Warner Music revealed on Tuesday something we've all long suspected: music sales have witnessed a growth slump on iTunes since the record labels pushed Apple to implement a variable or tiered pricing model. As a result, consumers have slowed their spending habits of media on iTunes, making fewer purchases and fewer Miley Cyrus downloads -- I'm ok with that part in fact.

The cause of decelerating sales can be attributed the associated price hike in new or premium content, which received an unpopular 30% cost of living increase from $.99 to a more salty $1.29 price point. It turns out that people are reluctant to pay thirty cents more today for something that cost a buck yesterday. What is it with you crazy people and your fickle spending habits?

This decline in spending is beginning to eat into Warner's bottom line, where iTunes makes up the majority of its digital revenues. The company saw a 50% decline in revenue in their December quarter, at just 5% growth -- down from 10% in the previous quarter. Ouch! Note to businesses everywhere: This is what happens when you issue a price increase in the middle of a recession. We'll have to see if the record companies take a hint and reconsider their pricing at all.
jobs & resumes
TUAW Jobs

Find the Best Candidates & Jobs on the TUAW Jobs Job Board

Find a Job / Post a Job›

Reader Comments (Page 1 of 2)

Add your comments

Please keep your comments relevant to this blog entry. Email addresses are never displayed, but they are required to confirm your comments.

When you enter your name and email address, you'll be sent a link to confirm your comment, and a password. To leave another comment, just use that password.

To create a live link, simply type the URL (including http://) or email address and we will make it a live link for you. You can put up to 3 URLs in your comments. Line breaks and paragraphs are automatically converted — no need to use <p> or <br /> tags.

Tip of the Day

Customize your desktop. While in the Finder, control-click (right-click) and choose 'Show View Options'. A box will appear allowing you to change the size of desktop icons, their spacing, text size and the position of icon labels.

Facebook
Follow us on Twitter!

TUAW [Cafepress] 

Featured Galleries

DNC Macs
Macworld 2008 Keynote
Macworld 2008 Build-up
Google Earth for iPhone
Podcaster
Storyist 2.0
AT&T Navigator Road Test
Bento for iPhone 1.0
Scrabble for iPhone
Tom Bihn Checkpoint Flyer Briefcase
Apple Vanity Plates
Apple booth Macworld 07
WorldVoice Radio
Quickoffice for iPhone 1.1.1
Daylite 3.9 Review
DiscPainter
Mariner Calc for iPhone
2009CupertinoBus
Crash Bandicoot Nitro Kart 3D
MLB.com At Bat 2009
Macworld Expo 2007 show floor

 

Our Writers

Victor Agreda, Jr.

Programming Manager, AOL Tech

RSS Feed

View more Writers

More Apple Analysis

AOL Radio TUAW on Stitcher