Will yahoo music subscriptions go up or down?
Yahoo Inc. has decided to double it's price for yearly subscriptions to download music, from $60 to $120 annually. Although Yahoo's prices will still be below that of their competitors, Napster Inc. and RealNetworks Inc. (who charge just under $15), once the subscription for Yahoo is over, the already downloaded songs cannot be used and these downloads are not compatible with Apple's ipod, which makes up about 3/4 of the market for portable music players. Do you think this change in price will effect Yahoos sales and take away the advantage of going with this company, or do you think that since the price is still lower than that of their competitors, Yahoo will keep production and quantity demanded up?
5 comments:
I think the increase in sales and total revenue, is depended on if yahoo has a inelastic or elastic demand curve, so the question is which one is it? I would guess that it is elastic becuase there are a lot of competitors, such as i tunes which is compatible with the i pod. I would guess that becuase it is elastic a rise in price would cause sales and total revenue to decrease.
I think that Yahoo's sales will fall because there are very many options for people to download music. If it were me, I would pay $30 more a year for songs that I could keep after the subscription expires and that are compatible with more listening devices.
Sales revenue for yahoo downloads are not as likely to rise due to the multiple suppliers of music. To the dismay of musical artists, there are still some many venues in which to download music for free. Not to mention there are so many more popular download companies such as I-tunes, etc in which, yahoo as a provider might not make as much as some of it's competitors.
I think that is not a good thing for yahoo. And the Yahoo’s sales will be decrease. There are so many competitors in this download music market. If Yahoo increases its price, I think there is a lot of people will give up to download from Yahoo and go to other places. And maybe other competitors will increase their price too, but if only less than Yahoo, that will hurt Yahoo at the same.
The demand will keep on going up cause its lower price may attract more consumers than other competitors.
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