Price war looms for music downloads

Apple is putting its iTunes prices up. But Amazon, which wants a chunk out of Apple’s 70% market share, is cutting download prices. A wonderful price war is looming for consumers who actually prefer to pay for legitimate digital downloads.

The Guardian reports how Amazon has slashed prices on a range of popular mp3 downloads. The aim is simple - to use penetration pricing as a way of capturing market share from iTunes. It is an aggressive pricing tactic - but entirely appropriate for perhaps one of only two online giants who can compete with Apple (Google being the other).

Back at the Apple ranch, a new pricing policy for iTunes. Instead of the flat 79p per song that has been iTunes’ single price for the past few years, some tracks in Apple’s music library are now priced differently - costing either 59p, 99p or the old 79p standard. The Guardian has taken a look to see if regular downloaders will be better or worse off than under the flat-price structure.

Lots of great materials to use in this market for describing the various pricing strategies and tactics available to businesses!