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APPLE JACKING iTUNES RATES?
New York Post Report Says Deals Already
in Place
After one year and some 70 million paid downloads, Apple Computer has agreed to allow some music on its sector-leading iTunes Music Store download shop to be priced higher than the 99-cent single/$9.99 album norm it helped establish.

According to a New York Post report, member of the Big Five label groups had been lobbying Apple for higher prices for some time, and new deals with all five have already been signed with the iPod maker.

At least some of the new deals allow for singles to be priced at as much as $1.25, while albums, some of which are already selling on iTunes for more than $9.99, could rise by 60% or more. N.E.R.D.’s Fly or Die (Virgin) is currently selling for $16.99 on iTunes, the Post points out.

Some usage rules have changed for tracks purchased on iTunes. Any one particular playlist may now only be burned to CD seven times instead of ten, for example. While that seems like a small adjustment, some observers puzzling over the rate hike in the still-nascent legitimate download market see it as another case of charging consumers more for less.

Indeed, in a world where legitimate services are still battling to compete with free P2P networks, raising prices seems counterintuitive at the least, these observers say.

The Post story points to Apple’s marketing partnership with Pepsi as a sign that the iTunes service hasn’t quite taken off the way backers had hoped. Apple had made 100 million free downloads available to Pepsi via special codes on bottle caps, but only five million, or five percent, of these were redeemed in the recent promotion.

While that redemption rate seems slight, retail experts are calling it a win, saying promotions requiring consumer action usually see a redemption rate of about three percent.
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