Tuesday, March 23, 2004
Music Prices: How Low Can They Go?
Posted by Jason Dunn in "NEWS" @ 06:00 AM
"Wal-Mart Stores is bringing cut-rate prices to the ever-more-crowded world of online music. On Tuesday, the mammoth chain retailer formally opened its online music store, from which customers can download music at 88 cents per song. That's 11 cents less than Apple Computer charges at its iTunes music store, which has been the pacesetter on this e-commerce track. The Wal-Mart service allows customers to play downloaded music on Windows PCs, to burn songs to a CD or to transfer music to portable devices. Usage rights are uniform across the company's catalog of music. The retailer began testing the service in December and is working in partnership with Liquid Digital Media, formerly Liquid Audio."
Now that Wallmart is selling a song for 88 cents, will Apple match this? It's been said they lose money on their iTunes service as it is, so I wonder, how low will Apple go? And will iPod users start to complain about having to pay more for their music because the iPod isn't compatible with WMA? There's a lot of speculation that HP will be able to apply pressure on Apple and WMAs will be supported - which begs the question, what will happen to iTunes if they're forced to drop prices to compete with Wallmart? There aren't many differentiators here - AAC vs. WMA? Does the average consumer care? And will iTunes customers really be willing to pay more to get the same thing? It's not like the audio files have a distinctive Apple design or anything... ;-) Or perhaps this is much ado about nothing - will the average person care about a difference of 11 cents?
Now that Wallmart is selling a song for 88 cents, will Apple match this? It's been said they lose money on their iTunes service as it is, so I wonder, how low will Apple go? And will iPod users start to complain about having to pay more for their music because the iPod isn't compatible with WMA? There's a lot of speculation that HP will be able to apply pressure on Apple and WMAs will be supported - which begs the question, what will happen to iTunes if they're forced to drop prices to compete with Wallmart? There aren't many differentiators here - AAC vs. WMA? Does the average consumer care? And will iTunes customers really be willing to pay more to get the same thing? It's not like the audio files have a distinctive Apple design or anything... ;-) Or perhaps this is much ado about nothing - will the average person care about a difference of 11 cents?
