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iTunes, songs at $ 1.29 drop in the charts

Price differentiation is not doing well for the ranking of songs that have risen in price. This is demonstrated by an investigation carried out by Billboard, a magazine specialized in music and entertainment.

According to what is learned from a survey compiled keeping track of the ranking positions before and after the passage from 0.99 to 1.29 $, the increase meant a drop in several positions. From Tuesday to Wednesday the 40 songs from $ 1.29 lost an average of 5.3 positions; the remaining 60 (which held the price of $ 0.99) rose 2.5 positions. The trend also continued the following day. The 99 cent songs were at that point 53 and their rise was 1.3 positions, the remaining 47 fell by two positions. The following days reflected a similar trend: over the period of time monitored, the songs that lost positions were 45 and the average drop in the ranking was three positions.

The conclusion that can be reached that customers who buy on iTunes have an eye for prices and tend to favor songs that cost less at the expense of those that have a higher price. That this hurts the ranking seems fairly proven (the "enough" due to the fact that there is no proof that the same ranking movements would not have occurred equally in the absence of the price increase), less sure that it also hurts record company balance sheet.

Again according to Billboard, because a drop in the ranking of a song from 99 cents to 1.23 cents also reflects a drop in turnover, the loss of sales should be no less than 23.3%. As a result of this differential, only the songs in the first places, those with the highest sales, can actually be damaged in turnover by a drop in the ranking. For example, says Billboard, a song that due to the price increase passed from 43 to 47 in the ranking would lose only 3.5% of sales and therefore the record company would continue to earn abundantly; the same can be said for one that went from 4 to 7 (-19% of sales). On the other hand, the one that dropped from third to sixth place (-30% of sales) would lose sales. Billboard estimates that a song that went from 42 to 45 in two days generates $ 2200 in more revenue, despite the loss of position and unit sales.

It should be noted that as far as Italian iTunes is concerned, it is difficult to say what the movements traced by the new price dynamics were. However as far as we are concerned, as in the rest of Europe, the 1.29 euro songs are few. In the Italian iTunes in the top 100 there are only 10 and of these 10 5 are located between 88 and 100 (although one, Lady Gaga's Pocket Face, in third place). On the other hand, in Italy, contrary to what happens in the US, there has also been a 69-cent song from the first day of differentiated prices in the top 100 list; it is Metro Station's Shake It which is slowly going up and now 57, but it is not clear if this is happening for the lower price or for the success that the song is having. In Germany and the United Kingdom, for example, the same song (also sold here at a reduced price) much higher in the ranking than Italy.