It’s basic economics; when you charge less for a product, more people will buy it as long as everything else remains constant. Setting the price of music too high means more people will choose not to purchase it, and that more people will download it illegally. Setting the price too low means losing out on profit unnecessarily. It’s simple stuff that people who study economics in college learn at 8am while drawing pictures of the person in front of them in their notebooks.
Apparently, music execs spent too much time doodling and not enough time listening because according to a new study, the price of music has been set unnaturally high causing labels to lose out on consumer dollars. According to the study, conducted by the world renowned Wharton School of Business, the optimal price for music is somewhere between 60 and 70 cents per song, and labels would profit by lowering costs. Sometimes high prices cause consumers to associate value with an item which can drive sales, but in the case of recorded music people are already aware of its actual value- LOW! Check out more info on the study here.