VARIABLE DOWNLOAD PRICING CORRELATED WITH SLOWER MUSIC SALES
It has been about a year since the music labels got what they had been asking for from the major online music stores: tiered music pricing. Problem is, that system may not be working out as well as the labels had hoped—Warner Music Group has reported slowed digital music growth since the pricing changes, and even though the company tried to spin the news as positive, it acknowledged that the timing may not have been the best.
Warner's digital sales (and by "digital," it means online sales, not CDs) made up 20 percent of its total revenue in its quarter ending on December 31, 2009—flat sequentially from the previous quarter. Unit growth in "digital track equivalent albums" saw a five percent growth rate during the December quarter, though it's down from 10 percent in the September quarter and 11 percent earlier in the year. Digital revenues were up eight percent year over year, compared to 20 percent the year prior.
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