The Swiss newspaper TagesAnzeiger has an interview of Eric Garland on the digital music market (in German and broken Babelfish English). Essentially, he says that a whole generation of customers has been lost for the music industry through "piracy" and that the music industry should accept this instead of fighting it. One way to do so is to massively lower the price of music. At $1 a song, people hesitate to buy and look for alternatives. At $0.10, they would buy without hesitation and much more frequently. Piracy is then not worth it anymore.

This reminds me of the comparison between the early US and British book industries in Michele and David's book. Flood the market with cheap goods, then no one can offer a lower price and you still make more profit than by enforcing copyright. And you improve public welfare, too.

"At $1 a song, people hesitate to buy and look for alternatives. At $0.10, they would buy without hesitation and much more frequently."

Bullshit.

The jump from free to any price, even one lousy cent, is a huge, enormous jump because it makes the difference between "click, download, got it" and "go sign up for a credit card at usurious rates, fill out tons of forms, receive card, go sign up for a subscription web site, fill out tons of forms, give out card number, get mysterious charges on card, hear about huge data breach of several hundred thousand credit card numbers, get free credit monitoring as compensation, discover you're the victim of identity theft ..."

And until we have a vastly better payment system that's much more secure and convenient to use (including for non-Americans!!) this is not going to change.

(Not that even ten cents is a "low" price on something whose marginal cost is about a dime less than that.)