Last week’s price changes at iTunes had a measurable impact on the store’s top sellers. In aggregate, the 33 songs that were raised to $1.29 from $0.99 last Tuesday sold 12.5% fewer units last week than they sold in the previous week at the lower price, according to Billboard analysis. The 67 songs that remained at $0.99 sold, in aggregate, 9.9% more units versus the previous week.
The price increase did not drag down track sales. Last week, total track sales were up 3% over the prior week. Sales of the Billboard Top 200 digital tracks rose 1.3% while sales of the top 100 tracks rose slightly less than 1%.
The songs that comprised iTunes Top 100 chart last Tuesday sold 0.5% fewer units – 4.62 million from 4.64 million units the prior week. Even though fewer units of those 100 songs were sold, their total revenue increased in the first week of the price change. The drop in sales was not large enough to offset the extra $0.30 received. If those price increases had been matched by all other download stores, revenue from that list of 100 songs would have increased 11.8%. On Wednesday, nearly half of the iTunes Top 100 songs had been raised to $1.29.
If an 80% market share is given to iTunes, and one assumes no other store raised its prices, the Top 100 songs’ revenue would have risen about 9.5%. Some stores did raise their prices, however. Last week it was widely noted that Amazon.com and Wal-Mart had increased some prices on popular songs but not to the extent of the changes at iTunes.
Some of the changes were natural ebbs related to the timing of a release and had little to do with the price increase. If the expected second-week drop of Black Eyed Peas’ “Boom Pow Pow” is taken out of the calculations, the 33 songs priced at $1.29 sold only 6.9% fewer units (versus 12.5% with the song’s decrease included in calculations). The song sold 465,000 units in its first week of release and dropped 28% to 335,000 units last week. Flo Rida’s “Jump” experienced a 71% second-week decline, to 7,600 units, that was not entirely related to the price increase.
GS Boyz’ “Stanky Legg” provides a good example of the impact of the price increase. In the weeks prior to the bump to $1.29, the track sold 22,424 and 22,686 units. Last week, after being raised to $1.29, sales dropped 12% to 19,692 units. Akon’s “Beautiful” had a similar trajectory over three weeks, from 58,861 to 57,941 to 52,760.
There has been some hope that higher track prices would encourage consumers to buy the entire album instead. There is no clear picture if this happened after the first week of the price change. Total album sales rose 10% over the prior week while digital album sales increased only 3%. Unit sales of the Billboard Top 200 digital albums rose 4.8%. There were individual instances of positive changes surrounding the price change. Akon’s track “Beautiful” dropped 9% last week but digital sales of his album, Freedom, increased 18% while sales of the CD rose only 9%.