For the time being, songs on
iTunes will still cost just 99 cents.
The iPod maker confirmed on Monday that it has renewed its licensing agreements with the Big Four music publishers --
Warner Music Group
Universal Music Group. The
first reported the renewals earlier on Monday.
Company spokeswoman Natalie Kerris said she didn't know the length of the new agreements or if the terms of the deals had changed. However, she did say that Apple will continue offering songs at the controversial 99-cent price under the new agreements.
Representatives of the Big Four did not return calls seeking comment.
In recent months, as the expiration of the preceding contracts drew near, executives at record labels had been publicly calling for Apple to change its fixed-pricing scheme for songs.
Apple charges the same price for all the songs on iTunes; the music publishers were hoping to charge more for recent releases and possibly less for older tunes.
Analysts and music industry officials have argued that there is little money to be made in a la carte online music sales. But that's up for debate.
Of the 99 cents that Apple charges for each song its sells, the company reportedly pays the labels 65 cents or more.
Though analysts estimate that Apple's iTunes business is only marginally profitable, some have argued that the music industry is seeing fat profits from the company's iTunes business.
Indeed, Apple CEO Steve Jobs strongly resisted raising prices, even going so far as to reportedly call the labels "greedy." Jobs has contended that prices need to be low enough on legal music downloads to compete with illicit file-sharing networks, where users can essentially download music for free.
Raising prices would only drive more users away from legal file downloads and onto illegal networks, Jobs has argued.
Apple is the leading vendor of online music in the U.S., with more than 85% of the market, according to recent research reports. Those numbers do not include subscription services -- which Apple's iTunes dwarfs -- and largely
haven't caught on with the public.
Shares of Apple closed regular trading on Monday off 79 cents, or 1.1%, to $69.60. They rose 8 cents in recent after-hours trade