iTunes and Lawsuits: "This is crazy. Online prices should always be much lower than physical CDs. The economics of downloading favor high volume. CDs have to be pressed, warehoused and shipped, but in the online world, you transmit a file to the vendor and just collect money. When a super popular artist like Norah Jones emerges, forget about convincing a hundred thousand people to download it at $13-get a million people to make the mouse-buy for five bucks. It's nice to sell 100,000 Norah Jones albums online at $13, but even better to sell 2 million at five bucks a pop."
They finally start to see that when you remove physical manufacturing and distribution costs, prices should fall.
The recording industry never recognizes this. CDs cost less to produce than LPs did, but cost about double. Online downloads cost virtually nothing to offer, but they're more expensive than CDs. Every time the industry is forced to adopt a new technology (almost always after fighting it every way possible for years), they use it as an excuse to double-up their back end, and stick it to the consumers (also presumably in the back end.)
As an example, www.livephish.com offers CD-quality concert downloads for under $5 per disc, and they sold over a million shows in their first year online. This is the same sentiment echoed in the article -- "This is crazy. Online prices should always be much lower than physical CDs. The economics of downloading favor high volume. CDs have to be pressed, warehoused and shipped, but in the online world, you transmit a file to the vendor and just collect money. When a super popular artist like Norah Jones emerges, forget about convincing a hundred thousand people to download it at $13-get a million people to make the mouse-buy for five bucks. It's nice to sell 100,000 Norah Jones albums online at $13, but even better to sell 2 million at five bucks a pop. "
drteknikal@gmail.com
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