Thoughts on Digital Music

One thing I’ve disliked about online music sales is the price.  At first, 99 cents for a song seems like a bargain.  But, when you start purchasing a lot of songs, it starts to add up.  Buying an album on iTunes is almost the same price as buying a CD!  Why on Earth would you buy an album on iTunes when you could get the CD for almost the same price?  A CD would free you from the effects of DRM and give you a physical copy, all in better quality than iTunes.  The only situation in which it makes sense to buy songs on iTunes is when you’re buying a single.  The situation is still the same when you’re buying from other online services, such as Amazon.  Even though Amazon has no DRM, the tracks are still compressed.  If you buy a CD, you have the tracks in an uncompressed format.

This isn’t the merchant’s fault either; it’s the record labels fault.  They are getting the most profit from the online music sales, somewhere in the neighborhood of 70 cents per song.  The rest of the money goes to bandwidth and other costs associated with selling music online.  This gives the merchants only a few cents profit.

Think about it.  The current 80 GB iPod Classic can hold up to 20,000 songs.  That’s twenty-thousand!  Going by the iTunes store price, that would cost you around $20,000 to fill up.  Nobody is going to pay $20,000 to fill up their iPod!

If the record labels would stop demanding so much of the money from each song sold, I bet they would sell many more songs.  If the price of a song was only 33 cents, people would buy much more.  The record companies would make up for the lost profit in no time because sales would rapidly increase!  Three songs for a Dollar!  That sounds great!  Not to mention the reduction in piracy.

I think that the record labels will eventually realize that 99 cents is too much.  Give it a few years and I think things will become more reasonable.  Eventually people will stop buying CDs and just download online, once the price is right and the process is simple enough.