Though Amazon’s new music download service is still way behind iTunes from a profitability standpoint, the e-commerce giant is hoping to draw customers by offering a service that Steve Jobs has steadfastly resisted: variable pricing. Record companies have long been interested in charging different amounts for new music, reissues, or emerging artists, but Apple has maintained its one price policy whether selling the latest Jay-Z or Warrant’s Greatest Hits. Though record companies have cashed in seventy of the ninety-nine cents of the iTunes selling price, they are hoping the new Amazon model will help increase their sales and profitability further. Amazon will now buy the music from record companies for a set rate, and then set a higher retail price. While record companies will be forced to sell certain music at lower rates, the increased volume of selling through an e-commerce giant like Amazon could increase their profit margin. Recording companies can also set the initial prices as high as they feel is prudent, sometimes as high as the eighty-nine cent retail price. Amazon has already committed to selling some popular music at a break-even point in order to offer a comprehensive selection. Its ace in the hole, of course, is that their music works with iTunes, which has hurt the profitability of every other music download service. While there’s a lot to be said and done before Amazon can claim a significant part of iTunes’ market share, its business model seems to be innovative enough to make a dent. [Business Week]