Itunes Music Essay

3097 WordsNov 4, 201413 Pages
Case 3: iTunes Music Pricing 1. The various music-recording companies have the individual music pricing policies. Some have the view that Apple should increase its prices others are of the view that the costs should be held constant. The numerous companies, which are in competition, would attract various customers who are wooed by the various prices and quality of music they purchase from Apple. Hence, the company would be able to share profits based on the agreed terms with the Music Companies 2. Reduction in the cost of online music has the likelihood of attracting more buyers who opt to buy online music instead of records sold in music shops. In addition, the company could also resort to sale of large music files such as MP3s, JPEG and MP4 and other music formats for various consumer needs (Brickley, Smith, & Zimmerman, 2009). 3. Sophisticated means of pricing might result to reduced earnings because it becomes difficult to have consistency in the sale of the music. In addition, sophisticated means of pricing are likely to accrue more profits because of various channels of revenue generation. 4. Apples aim of selling music can be attributed to increasing the sale of its music players with specific reference to the iPod. In addition, the sale of music would provide a great platform for people to experience its products. However, the aim of the music record companies is the sale of music via online means. This has been a new source of revenue with the rapid growth of the internet. This has been another source of revenue, which is proving to be lucrative as more people use the internet to conduct their daily activities. 5. With the increase in the demand for online based music, Apple is likely to increase its prices to gains more form the demand of its products. The company cannot however enforce high prices on the consumers because the sale of online music is

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