The record industry is crumbling, as it should, and music is slowly coming back around. If artists make only a few cents per recording, why wouldn’t they prefer to charge 25 cents a song and take home almost 100% of that? If “internet piracy” is such a problem, why not reward the true artists who can compel us to see them live, buy their merchandise, etc?

Yes, the days of DRM, the RIAA, in fact all record labels are drawing to a close. Mark my words: the music landscape will be dramatically different in a decade.

But why is AllOfMP3 so popular? It’s not just because its non-DRM files – it’s also because it’s the right price. Some people out there believe that 99 cents is a good price for a song. They buy from iTunes. Maybe 99 cents is a good price, but not for a DRM’ed file it’s not.

Others buy in droves from AllOfMP3. They pay 2 cents a megabyte, which is much fairer – short songs are cheap and long songs are more expensive. But I submit that if AllOfMP3 DOUBLED their prices, their business would not change in a significant way. I submit that if they TRIPLED the price, it still wouldn’t be majorly effected. See, paying a dime for a song is great, but I’d gladly pay a quarter or even 40 cents without blinking. There’s a value associated with these things, and people know this. Furthermore, people are WILLING and, often, even WANT to buy and own something legitimately if it’s the right price. But when they are overcharged, or with DRM’ed file, sold an inferior or limited product, they feel cheated, and begin to rationalize stealing in a Robin Hood fashion.

If DRM’ed songs were legit and 10 cents a piece, I probably wouldn’t buy them, but MANY MANY more people would, and MANY MANY more tracks would be sold to the same customers who buy now. If they were 40 cents, you’d probably see another appreciable growth.

My point here is that 99 cents is too much for a restricted digital file containing one song. There are two major flaws to the product – it’s overpriced and it’s limited in use. Fix one of the two and you’ll see your market explode. But go the opposite way – higher prices and more restrictive DRM – as things seem to be going, and you’ll watch your increasingly savvy market come up with more inventive ways to get their music. AllOfMP3 is just the beginning.