According to a report in today's Los Angeles Times, Apple's iTunes Music Store will begin offering variable pricing for single-song downloads, raising the price of the most popular tracks to $1.29 while lowering the price of other tracks to $0.69. (CNET's Greg Sandoval broke the original story when Apple announced this variable pricing plan back in January.) Some industry players quoted in the story point out that raising prices in the worst economy since the 1930s doesn't make much sense--especially since, as I've pointed out many times in the past, iTunes competes with a huge number of songs that are priced at $0.
This is especially true now: illegal file-trading has been around since the early Napster days, but there are an increasing number of free or cheap legal streaming services out there like Spotify, Imeem, Lala, and Songerize. Then again, none of these services offer what iTunes does: a simple way to buy songs and get them directly onto your iPod or iPhone. I imagine that customers will continue to use a wide range of streaming services to discover new music, but when they actually want to buy, iTunes will remain the default choice.
Follow Matt on Twitter