Recently iTunes made the move to variable pricing on its tracks, as opposed to the flate .99 rate of before. The switch was a move to make labels more money, and so far…it isn’t working. According to Digital Music News, multiple sources inside the industry have confirmed that thus far, sales from the iTunes Store have decreased with the variable pricing model, as opposed to the pre-variable pricing model. Labels probably anticipated that sales might drop, but that higher prices -some going as far as 1.29- might net them more revenue. So far this has turned out not to be the case, with total revenue down as well.
Digital Music News also reports that Labels aren’t taking this as the final verdict on variable pricing; labels will likely just adjust prices in the hope of making variable pricing work. One executive told Digital Music News, “It’s back to the abacus to figure out the best mix.”