The new on-line music services charge only $9.99 for an entire album—gee, what a bargain, right? Just compare that to prices almost double that in stores.

But wait a minute. Leaving aside the fact that the music companies have no production or retailing costs other than the cost of running their on-line store, has anyone considered the fact that the average consumer holds on to a physical CD for 10 years or more, but will have to buy the album they bought on-line all over again the minute their hard disk crashes, they forgot where they put the music, or they toss their computer without remembering to salvage the music from it?

Combine this with the fact that all the services selling on-line albums for $9.99 continue to put various types of copy restrictions on them—for instance, MusicMatch, the service which I’ve started to use, allows you to play music you bought there on only three PCs at any given time. You can burn the albums to physical CDs but are people really going to do that?

Given all that, isn’t the sweet spot for on-line album prices $4.99 instead of $9.99? And by extension, 49cents a track instead of 99cents?

This entry was posted on Wednesday, December 24th, 2003 at 14:24 and is filed under scitech. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.