Lower prices = higher profits?
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An addendum to the previous post about record label survival and album pricing: gas stations make higher profits at lower prices.
“We’re happy, our customers are happy,” says Jinger Duryea, president of C.N. Brown, which owns 108 gas stations in Maine and New Hampshire. “It’s not costing as much to buy the product and store the product.”
This could apply to MP3’s. They don’t cost as much to make and store as CD’s, and thus should be priced accordingly. I’ve said it before, and I’ll say it again: MP3 albums should cost no more than $5. Metal thrives on loyalty. With low prices, customers come in the door, and are happy to spend. A happy customer is a repeat customer. Someone with $10 to spend is more likely to buy two $5 albums than one $10 album of the same desirability. For a label, that buyer then potentially supplies two revenue streams instead of one.
