D'oh! Record companies losing sales on $1.29 pricing

…maybe not losing money overall, but losing sales, which drops them down the chart, which, in turn, loses more money.  Billboard, (via Giz) is reporting that songs that got jacked to $1.29 are seeing significant decrease in sales in just two days of higher prices.  At the moment, it appears that the price increases overshadow the loss of sales so there is still more money coming into the labels for $1.29 songs…but that’s just for now.  These things often spiral.

It isn’t all about music revenue for the artists.  They don’t always get paid based on sales revenues.  For the artists (some of them anyway), it’s about having a #1 hit or top 10 hit.  If the record companies decide to jack the price of an artist’s song by $.30, it appears that he or she has a much longer shot at getting there.  Their peers at $.99 are at a significant advantage.  This also affects the artists reputation and standing when negotiating future contracts.

This isn’t a minor blip either.  Take a look at the cart to the left furnished by Billboard.  $1.29 songs plummeted.   $.99 songs skyrocketed.

While two days of data might not a trend make, it certainly has to elicit pause.  If you are a record company exec, the decision to put the $1.29 bump on a song is a lot tougher knowing you are going to cost your artist a couple of rankings, maybe even the shot at a top seller.

Maybe Steve Jobs was right about keeping the $.99?  He’s got a pretty solid track record.