Price of Music Trends Downward

How do you price art? (And is Britney Spears really an artist?) The way the major music companies have answered this question has been a common topic in my newsletter and in earlier posts. Summary: since the consumer had few (legal) choices, ignore their needs and then wonder why demand was dropping. Now that legal music downloads are here, customers are back in the driver’s seat. In addition to iTunes, a resurrected Napster and Yahoo are now offering subscription services.

Napster offers a service for $10-$15 per month. Yahoo has a similar offering for $7/month, or $5/month if users sign up for a year. Napster has promised to hold the line on pricing, but do they really command that much of a brand premium?

Earlier, I had railed against these subscription schemes (see this post), but now I realize they make sense for certain market segments. Not “old people” like myself, who already have extensive CD collections, and purchase small amounts of music, but young people who have no CDs, and want to try out lots and lots of music. I keep forgetting that some of these kids have cellphones! What’s an extra $5/month to put music on them?

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