Tuesday, December 12, 2006

Why music sales are falling.

The music industry blames their falling sales on piracy, but in reality, the cause of this is economics. People do not want music for $1 a track. Most people want it free, and the people who are willing to pay for it aren't willing to pay nowhere near $1.00 a track. This is why the people who download music illegally do so, that particular supply is within the range they are willing to pay. In the end there will always be people who aren't willing to pay money, and in all likelihood the supply for those will also be there. But for those who might be willing to pay $0.10 per track are currently using the free supply. If the tracks offered were more desirable the demand curve would intersect at something better than $0.10. The best action for the music industry would be to sell at the optimum price of $0.10, or produce a more desirable product to increase demand, though I doubt the optimum price would be above or near $1.
Here is an illustration in case you need to see it.

*the author is by no means an economist and some of the preceding may be inaccurate but the general idea is the same, reduce music prices and have better music if you want good sales


At 11:20 PM, Anonymous Anonymous said...

I DL music from P2P sites, but that doesn't neccessarily make it illegal... It's not like I'm making a profit of it! :)

However, I agree with you -- the day of the CD album as we know it is almost over... People just don't want to spend their hard earned money on $14 albums with some songs that are "good" and others that are "worthless junk".

Apple's itunes, I think, sells individual tracks for $0.99/each. Like you suggested, $0.10 per track would be a hell of a deal!!

-- Erik (a.k.a. "TennisFanatic") The Aspie Conservative

At 10:19 PM, Anonymous NoDeca said...

what i hate is that i don't find my favorite music at all in common stores (free record shop, fnac, shopping malls,,,) no electro (except for dave clark or so but i'm into german electro), no good industrial and defenitely no breakcore. one shop i know has a limited collection but it's already years the same old dusty and expensive stuff (average of €20) and another just closed down. i'm tired of seeing artists joining music labels and turning into crap (or just seeing the crap music labels promote) and the crap i listen to i never ever see in the form of a plain ol' cd. i just looove booklets and the designs but i can't buy what they don't sell so i google it


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