However, Apple is focused on expanding its market opportunities related to personal computers and mobile communication and media devices. Was very worrying that people were still able to download free music from other sites.
The Company believes it offers superior innovation and integration of the entire solution including the hardware iPhone and iPodsoftware iTunesonline services iCloudand distribution of digital content and applications iTunes Store. Apple could consider other pricing schemes like a bundle pricing where they combine popular and unpopular music or getting the latest popular music across genres.
Executives from these two music companies argued that their revenue stream could be enhanced by flexible pricing. What types of songs do you think Apple tends to sell at the lower prices?
Every single time that Apple launches a new product the most loyal costumers excited sleep for nights on the doors of the stores to be the first ones buying the new products that always offer the most cutting-edge advances in technology.
Sophisticated pricing tools are potentially available to provide a contrast to the uniform pricing model that used to implement iTunes. When people become a fan of Apple never more would pay a similar price for another technology more than Apple offers.
The company cannot however enforce high prices on the consumers because the sale of online music is still in a changing stage. A variable sales revenue policy will definitely help is increasing sales revenue since one can target different customers based on their purchasing power.
We need to convert a lot more people to the habit of buying music online. Apple is pioneered providing its customers new products and solutions with superior ease-of-use, seamless integration, and innovative design, every time getting closer to the wishes of consumers. This sophisticated alternative tools may include song-specific pricing, pure bundling, mixed bundling, two-part tariffs among others that could be use to raise revenue.
They also could offer an entire group of songs, as a group, for a single price. Adjusted for inflation, the price is very close to the price of 99 cents per song. Under a new pricing plan songs would cost depending on how desirable they are considered and having Apple such a market power, the new pricing strategy was another successful for the company.
Nevertheless, iTunes survived, and the company was still betting on iPods sales at the same time. As part of its strategy, the Company continues to expand its platform for the discovery and delivery of third-party digital content and applications through the iTunes Store allowing customers to discover and download applications and books through either a Mac or Windows-based computer.
What are the risks and potential costs of implementing more sophisticated pricing schemes for the downloaded music? They complained that Apple had an incentive to sell downloaded music at too low a price to promote the sale of iPods. On the other hand record companies are just interested in gaining the greatest among of money from each company that distribute the music on which they have rights, they matter is to collet the most possible from every song downloaded.
Millions of consumers were still trading music free on unauthorized file-swapping networks and an increase in price would increase the incentives to engage in this practice. Jobs has got two revenue streams: Is this the objective of the major record companies?Feb 09, · After years of complaints, last year the music labels finally got what they wanted from Apple–the ability to raise prices on their songs.
Last April, iTunes introduced a “variable pricing” scheme, which gave the labels the ability to move prices from 99 cents a song to $ (and for some tracks, down to 69 cents). At MacworldPhil Schiller announced that Apple would for the first time allow record labels to begin implementing variable pricing on the iTunes Music Store.
Instead of a blanket 99 cent price point, record labels would now have the option to charge $ for more popular songs and $ for. 1. Provide an argument for why a more variable pricing policy might increase the sales revenue from Apple’s Music Store (compared to the flat pricing policy).
2. Why do you think Apple moved from one to three price points in ? What types of songs do you think Apple tends to sell at the lower prices? 3. Discuss other potential pricing policies that might increase the revenue from Music Store sales. 4. A little quick math implies that Apple is reaping larger rewards by increasing the price of hit songs by about 30 percent.
By my count, only 2 of the current top 50 songs, and 26 of the topin the iTunes Store are still priced at 99 cents, with the remainder at $ 1. In my opinion a variable pricing policy could increase the sales revenue of the music downloads. Increasing the price of the more popular songs and lowering the price of the lesser popular songs would increase the sales of the lesser popular songs.
Provide an argument for why a variable pricing policy might increase the sales revenue from Apple’s Music Store (compared to the flat pricing policy). Different songs are likely to have varying demands, and thus the optimal price for each song is not likely to be 99 cents%(43).Download