iTunes and Amazon MP3 are the two biggest online music retailers in the market today and both the stores introduced variable pricing structure for individual songs about two weeks ago. After introduction of variable pricing I noticed that same songs were priced differently on the services. For example, “Boom Boom Pow” by Black Eyed Peas is priced $1.29 on iTunes but it is just $0.99 on Amazon. Similarly, “You Found Me” by The Fray is priced $0.99 on iTunes but it is $1.29 on Amazon.

Seeing this variation in pricing, I was intrigued to find out which one of the two music retailers is costlier on average. Most of the top songs on both the services are either priced $1.29 or $0.99. So to get a general idea, I first compared the prices of top 10 songs on iTunes to their respective prices on Amazon. On iTunes, out of the top 10 songs, only three are priced $0.99 the rest seven were priced $1.29. On Amazon all the songs in the top 10 list were priced $0.99. To buy top 10 songs on iTunes one would have to pay $12, whereas the same songs could be bought on Amazon for $9.90, which is more than 20 percent cheaper than iTunes.

This difference in pricing made me think that may be Amazon is charging less for top 10 songs to attract new customer. However, comparison of total cost of top 20 songs ($24 on iTunes Vs $21.30 on Amazon) and top 100 songs ($120 on iTunes Vs $106.5 on Amazon) reveals a definite decrease in price percentage on Amazon when compared with iTunes music store.

It is almost impossible to compare complete catalogue of both the music services, but we can deduce that right now iTunes is more than 10 percent costlier than Amazon MP3 download service.