May
5
Warner Tests Digital Price Points
Warner Music Group has seemingly come to the realization that recorded music is too expensive for most people and will begin studying variable pricing with the hopes of finding "sweet spots" for consumers.
WMG has give Digonex Technologies the task of studying certain titles and certain retailers - no specifics yet - to generate recommendations on varying wholesale prices for select digital album downloads. Idea is to get prices in line with "perceived market value."
Apple's iTunes have long fought the idea of variable pricing, a concept that has been a mainstay in the brick-and-mortar world.(Wal-Mart, for example, wants only five prices for music, starting as low as $5.99). If wholesale prices vary and iTunes sticks to its one-price-fits-all, the music company can raise their hands and proclaim "hey, not our fault that music is so expensive."
Digonex uses its a dynamic commerce engine DigitalOnlineExchange, which suggests changes to prices based upon behavioral principles. The principle: Sell as many as possible and make sure the customer feels like they got their money's worth.



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