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Still, there's stuff I don't get. How are the very same labels that bitched and moaned about Apple's refusal to price anything above 99 cents with DRM restrictions going to be willing to let Amazon sell their stuff for ten cents cheaper and without restrictions? I guess it's already happened with the first two that signed on, but I'm suspicious that some agreement is in place whereby Amazon agrees to jack up the price after a certain amount of time. I guess we'll see.
There's nothing mysterious about this. I'm pretty sure that answer is that Apple wishes to make more per sale than Amazon or Rhapsody or Napster. It seems much more likely that record companies have a fixed rate at which they sell songs and that Apple's markup from the wholesale price they pay for the song is $0.10 more than Amazon and others. The record companies could care less about the retail price, they only receive payment for the wholesale price. In fact, the lower the margin, the lower the retail price, and more sales for which the record companies receive the same wholesale price.
That would also explain Apple's claims that record companies won't let them sell songs for less. The consumer only sees the retail price, not the breakdown of wholesale price and margin. Lowering either one would lower prices and increase sales, so Apple can claim that the record companies won't let them sell songs for less than $0.99, but what they are really saying is that they aren't willing to reduce their margin so any cost reduction has to come from the wholesale price. The record companies aren't going to be willing to let Apple pocket a higher percentage of the retail price than their current arrangement.
Kinda like a Wal-Mart type of squeeze on the manufacturers - we want to lower our prices but not our margins so you should lower your wholesale prices.
Of course this strategy of blaming the supplier for your high prices doesn't work once real competition springs up and offers the same product with a lower margin.
What I don't understand is why the record companies don't get into this business and put everyone else out of business by charging $0.30/song or whatever the wholesale price is. The only guess I can make is that people don't want to have to go to several different sites to compile their music collection.
