AT&T Targets Compulsive Spenders With New 'One for the Price of Two' Download Service

Does AT&T know how to craft a competitive value proposition or does AT&T know how to craft a competitive value proposition?

This morning, the company said it will soon offer wireless customers the ability to download music over the air from Napster–at a 50% to 100% markup over iTunes and Amazon MP3. AT&T is charging $1.99 a track, or $7.49 for five songs from Napster’s 4 million song library–prices that, while on par with those offered by Verizon Wireless, are double the 99 cents currently charged by not only Amazon and iTunes, but also Sprint, which reduced the price of its music downloads to 99 cents from $2.49 in March to spur demand.

Rob Hyatt, AT&T’s director of premium content, acknowledged the steep price point might be off-putting to some, but insisted it wouldn’t pose a problem for the impulse-control challenged. “They’re very price insensitive,” he told Reuters.