Music industry execs need to understand better how much their industry has changed in the digital age, Business Week opines.
Warner CEO Edgar Bronfman Jr. wants flexible pricing through digital music services, particularly Apple, effectively to produce the digital equivalent of sale CDs and premium gift packs in local record stores.
Extending prices beyond the seeming 99 cents consumer comfort zone has risks, though Business Week did find one analyst who suggested that music buyers would presently pay up to $1.29.
Apple's leader Steve Jobs in Paris publicly warned that raising prices at this stage would send the wrong message to consumers, driving them back to the pirates.
He even called the labels "greedy" for considering such actions.
Despite Bronfan's reported protestations, including claimed exhortations to labels to cut iTunes out of the digital music loop, (in a report that seems now removed from its source site), Apple has major negotiation clout.
With analysts at UBS predicting iPod nanos will account for "almost half the nearly 32 million iPods it thinks Apple will sell in its fiscal year 2006," Apple's iPod ecosystem is growing insanely fast.
This means Apple is the 800-pound gorilla of online music. "In the end, download prices will stay right where they are," said Business Week.