This rumored price hike raises all sorts of intriguing concepts. First of all, to those of you saying Id pay $1 but not $1.25 for songs NO WAY MAN, all I can say is yah, Im sure that extra 25 cents is really going to kill you.
That being said, I agree in principle though but it shouldnt just be about the cost increase, it should be about the fact the record industry is once again getting greedy. They lose heaps of money due to P2P networks and illegal downloads, then they finally start making money again off services such as iTMS, and then what do they do? Try and make even MORE money off online music service, because of course what theyre currently making isnt good enough. They should be thanking Jobs for being their savior, and they should be grateful that theyre actually making money, but no, they want more now.
In one respect though, its rather clever and ingenious of the record companies. CD sales have been hurting, yet guess what there is a large group of people still willing to pay for music, via these online music services. So, what the record company is possibly thinking is, lets raise the price of the online downloads such that people will find them too expensive, not worth it, and more worth their while to simply purchase the entire CD for the recording industry, its perfect, as in their mind this might encourage (force) people to start buying CDs again, which is what they want! The music industry realizes there will always be those people who download music for free illegally, regardless, so instead of targeting them, they are targeting the ones who are willing to pay, and essentially manipulating them to get back into buying actual CDs at the record stores.
The downside of this for the recording industry however is that many people who were legitimately using iTMS et al will simply revert back to downloading music illegally via P2P networks. A price hike like this will ultimately hurt iTMS, will be sad to see.
But as for the cost increase itself, from a purely monetary point of view, there definitely exists a price point at which consumers will not be willing to pay for online music downloads. In this day and age, it seems that everything is slowly going up in price, whether it be due to inflationary reasons, other economic factors or other reasons, yet due to the nature of this service and technology, I think price hikes will have a definite negative impact on the online music service industry and people will not stand for it. A shame, too, as this industry is still in its infant stages and shows so much promise. A price hike might permanently cripple the service, which would be a sad sight to see, both for the online music service industry and Apple as well.