Price as Signal: The recording industry is lying about why they want different prices (2005)

The proper link:<p><a href="http://www.joelonsoftware.com/items/2005/11/18.html" rel="nofollow">http://www.joelonsoftware.com/items/2005/11/18.html</a><p>I remember this article well.<p>This hypothesis would explain why variable pricing has arrived on iTunes now: It was a <i>quid pro quo</i> to convince the music industry to let Apple sell the 100% DRM-free music that it needs to sell in order to compete with up-and-comers like Amazon.

Let's accept the assumption that iTunes pricing doesn't obey the rule of lower price implying greater volume. For the theory to hold up, iTunes would have to represent a significant share of an artist's total revenues. Otherwise the artist wouldn't be bothered by a decrease in iTunes sales volumes.<p>But! As the importance of iTunes sales grows, an artist's incentive to keep a record label as distributor diminishes. Any artist can list themselves on iTunes - why would they share revenue with an evil record company if they don't need help with distribution and marketing?

There is an extra slash on the end of the link.