Musiconomics

Apparently, digital music is too cheap. I kind of disagree, as I'm sure does everyone else. It seems to me that record companies have a poor understanding of economics and their marketplace. The fact that I think there is a problem with their understanding of economics means either

• that they've learned less through real experience than I did in two weeks of university economics classes OR
• I don't understand all the factors involved.

Despite its apparent arrogance, I'm going with the first option.

I don't think digital music has reached its optimum profit point yet. Lower prices means higher demand, and up to the supply/demand equilibrium point that means more profit. My assertion is that we are currently sitting at a price above that equilibrium point.

Mokalus of Borg

PS - The usual stated reason for higher prices is to keep bricks and mortar stores in business.
PPS - Something's got to give.