Econ 101: Study Shows That If Record Labels Lowered Prices On Music, They Would Sell A Lot More
from the profit-maximization dept
Yet another study has come out suggesting that the industry has pricing all wrong, pointing out that the increase in sales from dropping the price of music would increase profits. And yet what has the industry been trying to do? That's right: trying to raise the price. The study suggested that the "optimal" price for music might be closer to $0.60 per track. That still seems way too high to me when you look at how people flocked to services like Allofmp3.com, but in general I think the basic concept makes sense. You can maximize revenue by dropping prices, but it doesn't seem like many record industry execs have realized that.