Adam L. Penenberg wrote about the music industry and its inability to create a business model that deals with digital downloads. We all know that piracy is here to stay, but what's the best way to handle it? Apple is handling it by offering downloads on iTunes. It costs a user 99 cents per song, and since 2003 iTunes has sold 600 million songs. If you do the math, that's A LOT of money.
Peneberg doesn't believe that 99 cents per song should be the "fair" price. Instead, he suggests the songs to be priced strictly on demand. Basically, it models after the stock market. The more people who download the song, the higher the price will go up... and vice versa. He figured this way consumers can't complain about the price since we are the ones driving them up.
It's a creative way to look at it, but overall, I don't think this will be a very good idea. A "Digital Music Exchange" seems a bit far-fetched... considering all the cons. It could run into problems of users hacking into the system to either drive up or drive down the costs, if a song becomes too popular, the cost of downloading one song could potentially equal the cost of going out to buy the entire album... etc.
So the ultimate question is who should set the price?.... consumers, or record executives? I say it doesn't matter because either way, consumers will not pay the price if they do not think it is fit. At the end of the day, anyone can set the price, but each individual will make different choices in purchasing.
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