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Last Updated: Tuesday, 2 May 2006, 09:50 GMT 10:50 UK
Apple wins iTunes download deal
Mini iPod
Consumers are increasingly downloading music
Apple Computers has renewed contracts with four of the biggest record labels to sell songs online at a fixed price.

The four companies included in the deal are Universal, Warner Music, EMI and Sony BMG.

The company is to sell each song within its iTunes music store for 79 pence each in the UK, or 99 cents in the US.

The record companies have been fighting for months to charge higher prices for new releases, rather than charge the same fixed price for all songs.

Variable pricing

There has been friction between Apple and the music industry, with Apple's chief executive Steve Jobs calling the music industry "greedy."

Digital sales - whereby consumers buy songs over the internet - only account for about 5% of the largest record companies revenues, but are growing fast.

Warner, EMI and Sony have expressed interest in a variable price system, where newer songs would cost more than older ones.

However, Universal has been more flexible, arguing that the market needs time to adapt before changes are made to the pricing system.

iTunes is by far the largest player in the digital music segment, with an 80% market share.

The success of iTunes has played an important role in boosting sales of Apple's best-selling iPod portable music player.

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