Do you like paying €20 for a CD? I doubt it. As a consequence, fewer people pay full price for a CD. With most of that money going to the record and distribution companies looking to make a buck instead of giving us great music, there isn’t too much moral incentive to pay that full price either. The artists’ cut is minimal. But how much should you pay so that the producers – artists and the required machinery around them – get their fair share also?

Due to the high prices, what’s happened is more and more people go online and download their music for free as MP3s. Which is what I did, too – it’s mostly convenient and legal in our corner of the planet, too, so why wouldn’t one? As a business model, nobody paying for any music is clearly unsustainable. But the current situation where the entertainment industry is stubbornly fighting against a major structural change that they are in denial about is also unsustainable. Most other industries have already gone through a structural change or a few and they survived – changed, but survived. For better and/or worse, the world is changing and all industries, including the entertainment industry, must change with it or face the music – pun intended.

From a consumer-point of view, CD prices and online music prices are mostly ridiculous. There is NO WAY I would normally pay 20eur – or even 10eur – for 45mins of music. iTunes not only has stupid DRM limitations but it’s still too pricey at 0.99eur per song. So what is the correct price?

I’m convinced that allofmp3.com – a place that I’ve mentioned some times before – has found the perfect basic model with their innovative volume-based pricing. I’m actually quite surprised to see how well volume-based pricing can work. What is so great about their service is that you get to choose what encoding to use (i.e. music quality – the better the quality, the more you pay) plus there’s no DRM protection of any kind. At $0.02 per MB albums come out around $1 to $2 depending on the encoding used. And you can even download some with lossless encoding. Plus it’s completely legal, too. Non-DRM’d content and the artists get their share – maybe not a big share, but you could easily double their prices, route all the extra money to the artists and like magic, they’d get more than they do now.

Oh, and there’s none of that encryption-breaking the Finnish legislators are so worried about..

Photo by freefoto.com