Apple

Wal-Mart, iTunes moves worry music industry Tiered pricing and 99-cent tracks likely to cut record-company revenues Vito Pilieci, Canwest News Service Published:”Tuesday, March 04, 2008 OTTAWA — Plagued with plummeting revenues and piracy issues, the music industry is about to get another kick to its sales figures courtesy of retailer Wal-Mart and the Internet music shop iTunes.

Wal-Mart, Billboard magazine reported Sunday, is about to reveal an initiative to sell some albums for as little as $5 US. The announcement comes on the heels of a study suggesting that by the end of this year, iTunes may well leapfrog Wal-Mart as the top North American seller of music. Email to a friend Printer friendly Font: * * * * The popularity of iTunes is continuing to climb based on its per-track price of 99 cents — a figure many in the music industry contend is too low.

Billboard said Wal-Mart may introduce tiered pricing for music, with hit albums costing $10, while other CDs would sell between $5 and $12, depending on popularity. The retailer’s move would help it try to maintain its No. 1 music-seller spot — but could further reduce revenues in an already ailing music industry. Graham Henderson, president of the Canadian Recording Industry Association, said the music industry is considering its options on pricing.

“We are tied to this 99-cent model and it has been a bit of a collar around our neck,” said Henderson. “This is a magic number that exists in [Apple chief executive] Steve Jobs’s mind and almost exclusively in his mind.” Henderson would not comment on Wal-Mart’s tiered pricing plans. He was looking into whether the plans would be implemented in the retailer’s Canadian locations.