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Why after all the whining from the record labels about Apple not wanting different (i.e. higher) prices are they allowing Amazon to sell for .89?
Maybe Apple is taking too high a margin on music? Somehow I doubt it. The label gets 70% of that .99 and the rest is for Apple and the artist. I believe the artist gets .10 leaving Apple with .20. That money has to take care of bandwidth, store design, dealing with Fairplay code (which is a requirement of the labels).
Don't get me wrong. Competition is great. Enjoy the spoils for now but look at the bigger picture and see that once again the labels are trying to manipulate you. Here's a possible scenario:
The labels entice you with price giving a better deal to Amazon than Apple. They hope the store gets popular. Then they have leverage against Apple for the next round of negotiations. If Apple doesn't allow the price structure they want (higher price for newer music) then they won't sell to Apple anymore because now they have Amazon.
Apple's iTunes Music store sees its inventory dwindle and people stop thinking of it as THE place to get music online.
Amazon becomes popular as it has more songs and artists. The only place to get the newest singles will be Amazon and they'll surely sell the newer singles for more. Amazon obviously won't take a hardline on prices like Apple has (as it has a variable price structure now anyway) and it will be the ONLY place to get the new tunes.
The labels win, Apple is hurting but not too badly because it makes the real money on iPods and the customer loses. Once again having to pay more for certain things and less for others determined by who the record labels think will make them the most money.
Hopefully the customer won't even realize how they've been screwed again as they've gotten used to Amazon's pricing.
