Apple computer announced digital box sets available for download from their online music store iTunes. These box sets would similar to the ones found in stores, which consist of compilations of music from an artist, usually spanning multiple albums.
The first release will be from U2, which will include every song they have written in addition to 25 unreleased tracks. The current pricing model that iTunes uses is 99 cents per song. This pricing model is followed by most of iTunes competitors as well. This box set will sell for $149.
At ordinary $9.99 album pricing on iTunes, the collection would cost about $185. If purchased by the individual track, it would run more than $425.Many market analysts feel that this will be the start of new pricing models for online music. The market is on its way to maturity and it’s a lot easier to change the prices now since people are more comfortable with the idea. Ideas such as changing the price based on the popularity of the song instead of just having flat 99 cent pricing have started to emerge.
At the same time however, iTunes has had to continually update their software as hackers have found ways to share music through the program illegally. Apple currently gives 65 cents per song to the record labels. Will record labels want more if this becomes a problem? It will be interesting to see if the pricing has to adjust not only because of file popularity, but because of illegal downloads.