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April 30, 2008
Cheaper Songs, More Expensive Albumsby David Harrell
Around this time last year, I noted that one result of pegging the single-song price at 99 cents is that individual songs within the iTunes store keep getting cheaper, at least on an inflation-adjusted basis.
As of Monday, the iTunes store is five years old. The CPI numbers aren't out yet for April, but for the five-year period ending in February 2008, the annualized inflation rate was 2.91%, with total cummulative inflation of 15.44%.
That translates into a current single-song iTunes price of 86 cents in April 2003 dollars. And, if inflation rates over the next five years are similar, iTunes customers in 2013 will be paying an inflation-adjusted equivalent of just 74 cents a track, assuming the 99-cent price remains:
While you could calculate a similar inflation-adjusted "price drop" for $9.99 album downloads, album prices have been quietly creeping up within the iTunes store. "Deluxe" and bonus track versions of albums can hit $13.99, but it seems like $10.99 and $11.99 prices are becoming more common for the standard versions of new releases.
If iTunes prices were completely correlated with the CPI inflation rate, single songs would now be selling for $1.14. And the $9.99 album price would $11.53, so averaging the prices of those $10.99 and $11.99 albums gives you a cost that is essentially "keeping up with inflation."
related: Digital Downloads: Cheaper Every Day?
tags: digital music iTunes Apple AAPL inflation digital media prices
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