Record labels should cut digital music prices to increase revenue, obviously
New research shows that the major record labels could actually increase their profits by cutting the price of digital downloads. I’m no expert, but yeah, I could have told them that. I didn’t because I knew they wouldn’t ever listen to common sense.
I’m convinced the music industry, and all major content providers for that matter, don’t actually live on the same planet as the rest of us. Otherwise it would surely have tried a different strategy to increase sales and discourage piracy than the one it currently is.
According to Wharton, marketing professor Raghuram Iyengar recently conducted a study of digital music habits. His conclusions were: pay-per-song plans are more popular than subscription models; purchases increase sharply when the prices are lowered; the optimum price would be around 60 cents per song (iTunes currently charges between 69 cents and $1.29).
There’s nothing groundbreaking there. In fact, it’s common sense supply and demand. But then the music industry exists in a bubble where phrases such as “common sense” and “supply and demand” obviously don’t exist. So it will carry on overcharging music lovers and encouraging piracy in the process. Champagne all round!
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February 1st, 2010
More to the point, sales would increase if the product – the songs themselves – were something more than overproduced, overcommercialized garbage. I still buy physical CDs but I’m down to maybe one a year. Add 3-5 a year for my wife.
We have a few hundred discs each but simply find that the vast majority of current music offerings are substandard. Most of those discs are older. There are some diamonds in the rough, sure, but those are increasingly rare.
February 1st, 2010
Too bad those who see this as “common sense” can’t also see the “common sense” of reducing tax rates would increase tax revenue. But being a Brit I’m not surprised, aren’t your tax rates like what, 75-80% of income?