Micropayments: why do iTunes songs cost the same price?

It may sometimes go unnoticed, but have you ever wondered why almost all songs on the iTunes Store cost the same price? In the small sample below, all songs cost R$2,90. If you take a deeper look into the Store, you’ll see that the same applies to most songs. There are, surely, different prices. But they’re still standardized.

Why would that be the case? Are all songs equally valuable? Do they have the same costs of production? Are all artists evenly experienced and studied? Do they receive the same praise?

I’m going to take a wild guess and respond negatively to all questions above.

The reason for equal prices is simple and straightforward. To understand it, we’ll have to grab some psychology of money, from our beautiful but no so elegant behavioral economics.

Imagine if each song had its own price. Say that “Blinding Lights” costs R$3,40. “Don’t Say Goodbye (feat. Tove Lo)”, R$1,10. “ S de Saudade”, R$2,50. Awkward, isn’t it? What would happen? How would you react to those prices?

Sometimes, you would do calculations. “Is Blinding Lights worth R$3,40?” Should I spend an additional R$1,00 on that song? How should I spend the R$20,00 I saved for music this month?”

Other times, you would simply not be bothered to think about it. “Screw it, I’ll now buy these five songs, whatever.” Or even: “these purchases? Not going to happen right now”.

See what a mess it would be if prices were all different? Revenues would plummet. It’s too much information for consumers. Micropayments are already a pain in the ass. To multiply them by a zillion prices? That’s just insanity.

If, however, prices are equal, the decision-making process is forked into a YES or NO response. “Should I buy this song? Yeah, why not? Should I buy this other song? No way!”

Such a framework facilitates decision-making. By altering the choice architecture, we’re now more likely to purchase songs on virtual stores such as the iTunes Store, App Store, Google Play, etc.

That’s how companies are exploiting your fragile psychology. “What can I do about it?” you might ask. Hum, not too much, actually, but…

Who the hell uses iTunes anyway?

Originally published at http://beyondsund.wordpress.com on May 1, 2021.