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Apple (Nasdaq: AAPL) is putting a new spin on digital albums by allowing fans to buy them online without having to pay again for songs they already own.
A new service from the company called "Complete My Album" is designed for customers who want to round out their music collection and turn already purchased individual tracks into complete albums. Customers receive a 99 US cents credit (the price of a single iTunes track) for songs they have already downloaded from the album.
If a customer buys two 99-cent singles from the latest release by Green Day, for example, and later decide to buy the complete album, they won't be charged for the songs on the album that they already purchased.
Shedding Duplicate Costs
"This service is definitely going to appeal to a wide range of iTunes customers who have become very weary of paying more than once for a song," Zippy Aima, an analyst with Frost & Sullivan, told MacNewsWorld.
"They'll feel much better buying an album knowing they won't have to duplicate costs," she said.
However, fans will only be able to take advantage of the service within 180 days after first buying the songs, according to Apple.
Apple is also making the offer retroactive for any iTunes tracks bought prior to Thursday. It limits the credit period to 90 days, or June 26.
"Of course, it should be lucrative for Apple," said Aima.
The Music Spins
The new service comes as the music industry continues to struggle with finding new ways to boost profits, as sluggish sales of digital songs have not reversed a precipitous drop in revenue from CD sales, according to Aima.
"There has been increased pressure from Web-based music download stores such as Apple's iTunes and Napster," Aima noted.
Down All Around
According to Nielsen SoundScan, sales for the album market in the U.S., in both physical and digital formats, dropped 10 percent in the first quarter of 2007 compared to the same period a year ago.
Although digital album sales doubled, CD sales, which accounts for 90 percent of traditional album sales, fell 20 percent, according to the statistics firm.
iTunes in Charge
While music labels and other music download services may be struggling, Apple continues to find tremendous success with the combination of its iPod MP3 players and the iTunes Music Store.
"Anything Apple does these days has met with great success," said Aima.
iTunes accounts for more than 70 percent of digital music sales in the U.S. -- in total, the service has sold more than 2 billion songs.
