Friday, November 20, 2009

TunesPro: Going broke selling downloads

Hypebot reports the launch of a new music store, selling downloads in America for 19 cents a pop.

The store, TunesPro, says it can do this price because it's absorbing a loss of 39 cents a download. It says it's happy to do that because it's cheaper than advertising. It also tells Hypebot that it is offering legal downloads.

In the comments section of Hypebot, anonymous sources are being cited suggesting that the last claim is as untrue as the first two are unlikely, but nobody seems quite sure.

Even if the organisation is legal, the business plan is very high-risk - spending forty cents to get every sale is the sort of thing that even the losing team on The Apprentice would avoid doing. You might attract price-sensitive consumers - at a huge cost - but (since they're price-sensitive) as soon as you return the prices to a level where you can make a profit, they'll be off again.


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