Music News: Will Amazon Push Apple to Lower Music Prices?

Dust2

http://www.foxbusiness.com/technolog...-music-prices/
Will Amazon Push Apple to Lower Music Prices?

Quote:

Until this week, iPhone users were essentially limited to a single music store: Apple (AAPL). The new version of Amazon's (AMZN) app changes that, allowing songs and albums to be purchased and downloaded directly onto the mobile devices--a development that experts say could put pressure on Apple to lower its prices.

Although iPhone owners have been able to download music stored on their Amazon cloud accounts since last fall, that music could not be purchased with an iPhone. The new app enables users to buy music from iPhones and then play them from any Apple or Android device. As a result, "Apple will probably price-match on the top sellers," says e-commerce consultant Brian Eisenberg. (A spokesman for Apple declined to comment.)

Amazon's digital music prices do tend to be lower than its competitors, says Brian Colello, analyst at Morningstar. For instance, many top-selling albums are cheaper on Amazon than on iTunes. Country singer Tim McGraw's album of "Number One Hits" costs $5 on Amazon's MP3 store, but costs $7.99 on iTunes. British singer Adele's album "21" is $9.99 on Amazon and is $10.99 on iTunes. "If Apple responds like others in the open market it will reduce the price of their music to compete with Amazon," says technology analyst Jeff Kagan. "That said, Apple doesn't typically act the way competitors do."

Here's what Amazon did 2 days ago utilizing html5

Quote:

Amazon's browser-based MP3 store has been optimized for the iPhone and iPod touch, allowing users to more easily purchase songs through their mobile Safari browser.

Amazon's catalog of 22 million songs, now available on iOS devices at amazon.com/mp3, competes with Apple's own iTunes Store. While Apple has a dedicated iTunes application on iOS devices for selling content, users must open a browser to purchase through Amazon because of Apple's App Store rules.

Music purchases through Amazon are automatically saved to a user's "Cloud Player" library. Those tracks can be downloaded or played instantly from any iPhone, iPod touch or iPad using the official Amazon Cloud Player app.

Here are the prices for the top songs on Amazon ------vs-------Itunes

I Knew You Were Trouble ----------------$0.99---------------------$1.29
Home-------------------------------------------$0.99----------------------$1.29
Thrift Shop (feat. Wanz) --------------------$0.99---------------------$1.29
Locked Out Of Heaven---------------------$0.99----------------------$1.29
Ho Hey-----------------------------------------$0.99-----------------------$1.29
Gangnam Style-------------------------------$0.99-----------------------$1.29

etc...

The music lablels are selling these songs at $1.29 x 70% = $0.903.

Amazon is okay with netting $0.087 from each song selling at $0.99. Itunes will net $0.38 from each song selling at $1.29.

Amazon and Itunes are the polar opposite of each others when it come to profit margin.

Apple: thrive on high margin
Amazon: thrive on low profit margin

Mister Martian

I prefer Amazon tbh... I only buy from iTunes to support my faves chart positions.

Ryan

I doubt it. Apple raised iTunes prices at the behest of the labels in 2009. The tiered pricing of .69, .99 and 1.29 allowed for Apple to remove their anti-piracy protection, allowing us to copy files and stuff. It also allowed for longer song previews.

People didnt flee iTunes then, they won't flee iTunes now.

Big Smoke

No. Its Apple.

BambooBanga

Quote:

Originally posted by Ryan

I doubt it. Apple raised iTunes prices at the behest of the labels in 2009. The tiered pricing of .69, .99 and 1.29 allowed for Apple to remove their anti-piracy protection, allowing us to copy files and stuff. It also allowed for longer song previews.

People didnt flee iTunes then, they won't flee iTunes now.

I was always wondering why the previews extended a whole extra minute!! Never knew this was the reason

Mr. Know It All

No, iTunes is unshakably popular; plus, I don't really know anybody that buys MP3s from Amazon, including myself.

Newt

What everyone else said

Also, most people probably won't even know they can do this

Kade

No, while ever people keep buying, the price will stay the same, if not rise.

$1.29 is cheap compared to the AUS store - $2.19

evfanjake

I hope so. I love shopping on amazon - it's so much cheaper than itunes in the long run.

.:Allen:.

I wish. But it's Apple, so probably not.

mic_alexander

I don't mind paying $1.29 since the iTunes files are actually higher quality than Amazon's 256 kbps mp3's (I've even bought albums through Amazon with 197 kbps VBR!). iTunes is also available in many countries, whereas Amazon's own music store is only available in select countries.

Dust2

Quote:

Originally posted by Mister Martian

I prefer Amazon tbh... I only buy from iTunes to support my faves chart positions.

Buying from Amazon also support your favs chart positions. Billboard/Nielsen count an Itunes purchase the same as an Amazon purchase.

The advantage of Amazon?

10 songs on Itunes = $12.90
13 songs on Amazon = $12.87

You got 3 more songs.

GaGaFan

Amazon >>>

They wil truly be a threat to Apple when they are able to significantly increase the integration with iOS.

Eric.

Quote:

Originally posted by mic_alexander

I don't mind paying $1.29 since the iTunes files are actually higher quality than Amazon's 256 kbps mp3's (I've even bought albums through Amazon with 197 kbps VBR!). iTunes is also available in many countries, whereas Amazon's own music store is only available in select countries.

!!! That completely limits their appeal. All over the world people know Amazon because of anything but their music service. And that detail you pointed out about the quality puts them even lower. There's a reason why Apple's more expensive and they keep raking up those catalogs from multiple labels.

And I hope everyone had bought Yo La Tengo's album.

reloaded

Quote:

Originally posted by GaGaFan

Amazon >>>

They wil truly be a threat to Apple when they are able to significantly increase the integration with iOS.

Which is not going to happen. Apple doesn't let 3rd parties get into their stock apps such as Music. Amazon will always live within its own App and not have playback directly within the Apple Music App.

Wafflecakes

Amazon is clearly the superior store.

Apple has gotten lazy. Sooner or later someone will come for their wig.

I pay 1/2 price on amazon in general compared to itunes after all the free credits and sales they have.

Poe Dameron

Nope they won't, and I don't mind paying £0.99 for a song as long as it supports my fave and the music industry

Wafflecakes

Quote:

Originally posted by aidan_dolan

Nope they won't, and I don't mind paying £0.99 for a song as long as it supports my fave and the music industry

Pretty sure the artist/label gets roughly the same amount (or more) from Amazon than itunes.

The difference between the two is that Amazon is willing to take smaller profit margins, or even losses, on songs because it brings people into the store. Usually the HEAVILY discounted stuff (.99c or 1.99 album sales) is not brand new releases.