iTunes downloads remain same price

SAN JOSE, Calif. -- Songs at Apple Computer Inc.'s iTunes Music Store will remain 99 cents per download after the company extended its distribution deals with major recording labels.\nThe recording industry and Apple had been at odds over Apple's insistence to keep its flat rate with some labels wanting variable pricing, including higher prices for new releases.\n"Apple has all the cards, and when you have all the cards, you can play hardball," said Ted Schadler, analyst at market research firm Forrester Research.\nApple shares jumped 2.9 percent Tuesday, after the renewals were confirmed.\nThe distribution contracts were up for renewal for the first time since iTunes launched in April 2003. Apple said Tuesday it would continue to offer the 99-cent pricing from a library of over 3 million songs, but declined further comment.\nITunes helped propel the legitimate music download business, and Apple claims it has about an 80 percent share of the market, which last year climbed to 353 million song downloads in the United States, according to Nielsen SoundScan.\nAnalysts say recording labels make about 70 cents per download but could pocket significantly more if the prices were raised by a few cents.\nRepresentatives from two of the four major labels -- Sony BMG Music Entertainment and EMI Group PLC -- declined to comment on the iTunes contract renewals. The remaining two -- Vivendi Universal's Universal Music Group and Warner Music Group Corp. -- did not immediately return phone calls.\nNone of the negotiating parties would say how long the new deals will last, but Schadler suspected the record labels insisted on shorter-term contracts.\nApple's dominance of the download market means the Cupertino-based company does have the upper hand for now, but analysts predict its market share will pare down as rival services, including online music subscription services, gain traction.