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Are Music Artists Profiting From iTunes' Price Increases?
Artists receive fixed residuals for music sales based on individual contracts
 Most companies realize that lowering prices is their only ploy to stay in business. Some companies are unaware, or simply don't care - that financial times are tough. As an example, Apple Inc. has recently increased the cost of music downloads on their iTunes music site from $0.99 to a staggering $1.29.
Some critics have suggested the price increase is due to updating custom DRM protection best known for lowering the quality of sound delivered to consumers while others attribute the 29% price increase to pure corporate greed.
One thing is for sure, the artists aren't making more money. "Artists receive fixed residuals for music sales based on individual contracts via their respective record companies," says Max Clingerman, a music executive for MixJam Records who explains "the staggering price increases are not for the artist interest, rather intended for executive pockets."
A recent "online behaviour trend" survey of 10,000 university students conducted at the University of Arizona concluded that paying $1.29/song has lowered 63% of the student faculty's desire to purchase music online.
The survey found that 78% of the students replied they are not committed to any specific music website, rather affordable prices is the overall dominating factor when shopping online.
"Since music is ultimately the same wherever you buy, it doesn't make sense to pay top price at iTunes if you can get the same music for a fraction of the price elsewhere," says Richard Parker, an alumni economics student who admits he stopped buying from iTunes & Napster because of the price hikes.
Parker says he prefers streaming music online via Pandora and more recently has begun purchasing music via TunesPro.com. "I only care that music can be played via my iPhone and burned to CD," says Parker.
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