D'oh! Record companies losing sales on $1.29 pricing

The way record deals are usually structured, The artist, producer, sound engineer, get a set royalty per track or album sold. In other words, even if sales decrease 30% the record company has pocketed the extra money. Basically the artists and the consumer get screwed at the expense of the Record Label's extra profit. Expect more increases.

I knew how to spoke english too.

Would be nice if you folks actually used a spellchecker before posting stuff. My brain thanks you!

Even more importantly than losing profit, the record companies are losing relevance. It used to be they scouted 'talent', promoted them, and offered a vast distribution network to get their stuff out. Now all neutralized by the internets. About the only *major* thing they have to offer bands these days is fronting the huge amount of cash needed to get a big tour going. And once they're no longer needed for that.. bye bye.

This article is not indicative of anything, as such data was expected by anyone with a fraction of business common sense.

A popular distribution portal of high volume sales content just took an average leap in price of 30% for popular material. Of course sales will screech to a halt at first.

There are two kinds of iTunes customers: Impulse and Cultivators.
The former buys music when the look or sound of a track catches their fancy, and the buy button catches their eye. The latter plans to purchase a track/album in the near future when they allocate the funds for it. Both are familiar with the $0.99 price standard, so anything showing $1.29 is going to give them instantaneous pause

Many music purchases will be delayed by a few days until folks realize they still want it, and purchasing will resume. The impulse buyer will still be a strong force as 1.29 isn't enough to stop them, only limit them to fewer impulses. The person who was cultivating will likely find another way to get the music in the meantime, and will likely "check" iTunes in the future to see the price of a song/album, before moving on to piracy. However, this person is always on the verge of pirating of track vs. buying.

I don't see this having a permanent negative effect, but definitely some short term.

Maybe the labels use what we used to call "Promoter Accounting."

A promoter of a concert would think like this: They expect to make $1000.00, but only make $850. You and I know they still made (profit) $850, but in promoter accounting, they lost $150.00.