At first, Apple insisted on keeping everything .99 not to keep everything as an impulse buy, but because the single price helped iTunes remains simple and Appley. Just like Apple doesn't like too many products, they wanted to keep the iTunes store as simple as possible in order to establish it. Since Apple isn't making their money from songs - just the hardware, they don't really care about the actual price of songs. Apple's main interest in iTunes is making it as simple to use and palatable to customers. If anything, charging 1.29 rather than .99 hurts rather than helps Apple, and Apple resisted the price increase.

However, now that iTunes involves much more than music, and the TV and film industry won't agree to the same single price "experiment" that the music industry agreed to, the single price model is history.

Given that, Apple no longer has their original reason to strong arm the music industry into accepting a single price.

At the same time, the music industry is collapsing, and has argued for higher prices for more popular songs for awhile. Apple got its way with DRM-free songs, and is ceding multiple-tiered pricing in return.

I'm not sure if it will crash and burn or if it will be no big deal. Maybe people who buy top 20 don't care. Also, I'm not sure how they'll determine the price, if that's something the record company will do, or if they'll be algorithms that sort it out. It's possible that if there are algorithms, the system can intelligently adjust to demand, so that if no one is buying a song at 1.29 it reverts to .99. Although that could also piss people off, if they buy a song for 1.29 one day and it drops to .99 the next.

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Um, when has this happened? Executives never do what is logical. Higher prices equals less profit? They will send out a press release blaming the economy. Or torrents. Or Steve Jobs.

They ain't gonna lower the prices, though.

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When you get to the precipice, don't say he didn't warn you.

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So they can charge you more.

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Part of it might also be that they didn't really think it through.

I still think that they just rolled out with the same system they used when EMI when DRM free. Obviously that was cheaper so people didn't really have a problem with paying for it all at once. Here (at least for me) you're talking hundreds of dollars. I think they probably listened to the uproar and made it an option.

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