Amazon cuts MP3 prices in attempt to close in on iTunes

Web retail giant Amazon.com has lowered its individual-song MP3 prices drastically, in an attempt to cut in on Apple iTunes' 70 percent market share.

Amazon has lowered the price on select top-selling tracks to just 69 cents. Apple charges almost twice as much for in-demand hits, which cost $1.29 each. Until 2009, when Apple introduced their tiered price structure and increased the price for current popular tracks and decreased mostly forgotten, older songs, all MP3s in the iTunes store were 99 cents, regardless of popularity.

Russ Crupnick, a digital music analyst at the NPD Group, told the LA Times that it was unclear whether the lost profits from Amazon's price cut would affect Amazon, or the record label, and was unsure whether customers would become loyal to Amazon, or continue to use iTunes with the exception of Amazon's lower-priced hit tracks.

"The average music consumer spends $46 a year on digital music, which is half of what it was last year," Crupnick said. "The question is not whether you can sell a 69-cent track. It's whether you can get a customer to spend $69."

Amazon only represents about 10 percent of all digital music sales currently.