Friday, March 30, 2007

New iTunes Service Lets Customers Complete Albums

Wall Street Journal Article
By NICK WINGFIELDMarch 29, 2007 11:14 a.m.

When Apple Inc. opened its iTunes Store for business four years ago, the company changed how consumers purchased music by letting them buy singles instead of full albums. Now Apple is giving its customers a new incentive to go back to the old way of buying music.

The Cupertino, Calif., company Thursday introduced a new offering on the iTunes Store called Complete My Album that allows consumers to purchase at a reduced price the remaining songs from an album for which they've already purchases singles on iTunes. The reduction consumers receive on album prices is based on the number of 99-cent tracks they previously purchased from the album: someone who bought two 99-cent singles, for instance, would pay $8.01 for the remaining songs on an album that normally retails for $9.99.

Previously, iTunes customers who decided to purchase a full album after buying singles would face two unappealing scenarios: They could buy the entire album, including the singles they had already purchased, or they could buy the album tracks they didn't already own for 99 cents each, a bad deal for consumers since albums on iTunes are invariably more expensive when purchased as individual songs. Apple typically prices full albums at $9.99, most of which have 12 or so songs on them.

"The idea here is that simple -- once you bought singles from an album, we'll give you credit for it," Eddy Cue, Apple's vice president for iTunes, said in an interview. "This is something that is another example of how digital music is a changer in the way we do things."

While many consumers have warmed to the idea of buying singles, the shift away from album sales has undermined a lucrative method of bundling songs together. Some music industry executives believe the emphasis on single sales through online retailers like iTunes is one factor behind a years-long decline in music sales, along with digital piracy, since consumers can now selectively purchase individual songs for far less money than they would otherwise spend on complete albums.

Mr. Cue said that about 55% of the music purchased through iTunes is sold as singles, a figure that has been consistent since the introduction of iTunes. He said Apple negotiated agreements with its partners in the recording industry to offer its new album-purchasing service to customers. As part of the service, Apple is giving consumers a motivation to act soon to buy the remaining songs on albums that they don't already own: The offer is good for only 180 days after customers purchase individual songs from an album.

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