Does Less Equal More for iTunes?

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People like to think they are getting a bargain. It’s really that simple. To the consumer $99.99 looks better then $100. It makes no sense, but something makes people think paying a cent less is a big deal.

That is the basic philosophy behind the iTunes store and why it has become so successful. Now Apple wants to experiment and set prices of TV shows at 99 cents instead of the usual $1.99 for standard definition and $2.99 for HD.

The networks, however, are wary. It’s understandable because they could loose money from the purchases being cheaper and loose viewers who would normally watch the show on TV all at the same time.

I think this could work. According to the article, Apple representatives said that 99 cents is the magic price and it really is.

It is so easy to buy things on the iTunes store that you sometimes forget how much you’re actually spending. I recently taught my father how to use the iTunes store and he wound up buying $40 worth of music in about 5 minutes.

I think this could also work for TV shows because it is cheaper, easy to buy and you don’t have to sit through ads. Personally this really won’t affect me. I do buy TV shows from the iTunes store but I refuse to buy standard definition, I’m picky.

This model can also be used for news. If a person doesn’t realize how much they’re spending, and is billed in small increments, they will most likely buy more. In my opinion, one time billing is not the best way to do things because the customer is paying up front.

Like we discussed in class today, charges $49.99 a year for access to other parts of the site. In theory a good idea and it could work but it would be better if they were to charge in increments rather then all at once.

It will be interesting to see if any news organization like The New York Times, which is putting up a pay wall in 2011, adapts this model. Only time will tell if it will work.


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