The record manufacturers have been busy suing everyone in sight for allegedly downloading music illegally. Yet just when legal downloading is beginning to take off at 99 cents, they want to raise prices of single song downloads to as much as $2.49. They are also considering bundling hits with less popular songs. Imagine walking into a Macdonalds, paying twice as much for Big Mac – but they will give you a Filet O Fish.
In some cases the albums available online for dowloading cost more than the CDs do in stores. And this is without any product, manufacturing, and distribution costs at all. So where are the cost savings? Costs involved in the recording industry are murky, with different royalties paid in different situations. However, it certainly appears that some of the motivation here is greed. There has been a substantial economic downturn in the past few years, yet the RIAA is surprised that sales are down. An article in the New York Times (free signup required) suggests that there may be other reasons why sales are down. A Harvard/UNC study indicates that the effect of downloading on sales is “statistically indistinguishable from zero”.
Customers are beginning to use these services. The market is beginning to grow. This is not the time to make up “lost” profits.