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David Cook Proves iPhone Apps Are a Trojan Horse for Music Pricing

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Steve Jobs' dogmatic “one price fits all" for music sold at the iTunes store faces an unlikely challenge -- from Apple itself.

Jobs has held firm to his 99-cents-per-song rate with one brief exception despite pressure from the major labels to charge different prices for music depending on demand and other factors. But Apple's own App Store for the iPhone and iPod Touch already allows artists and labels to do an end-run around those pricing restrictions and experiment with alternate pricing models and even ad-supported music.

Apple receives 30 percent or so of sales revenue from music sold in iTunes and apps sold in the App Store. However, Apple insists that all songs be priced at 99 cents, whereas the price range for apps appears to be anywhere from 99 cents to $999.99, giving artists and labels far more pricing options.

One artist has already managed to sell a song for twice the price Apple normally insists on; Sony Music is hawking David Cook's “Light On" through Apple's App Store for $1.99 (iTunes link).

Sure, it displays a virtual lighter while the song plays (see screenshot). But essentially, Sony has figured out a way to sell a single track for $2 through Apple's commerce engine -- a feat that is impossible outside of the App Store.

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