That's fine. But when people say, I don't want to pay X, so I'll just download it for free, then the system is broken. It's no longer based on demand, it's based on the ability to copy the product and give it away for free.
Thus, they are stealing that pile of shit. You can be certain that there are people that would buy the music, if not for the fact that they can illegally download it for free.[/QUOTE ]It does
NOTHING defies the laws of economics. It doesn't break, but business models do. Media companies are right, pirated copies are lost sales, however they're wrong that piracy is the cause. High prices are the cause. People won't go back to buying music until the price reflects demand. And people DO want to BUY music. People don't come up with 10,000 excuses for doing something wrong if they don't feel a little guilty about (like the dozen people in every conversation on the internet on this topic).
Now, using the law of economics, what will make people buy music? Well, the providers have 2 advantages. 1) Quality. 2) Convenience. People, being the inherently lazy creatures they are, will pay money if they don't have to search P2P networks for a good 256k rip. They'll pay even more for lossless, though that's a smaller market. Ideally, the Labels would band together in one single superstore. In reality, each of the big labels will end up with their own storefront, and the indies might glom onto their own service. Either is convenient enough. The labels do not have pricing power, so they have to cut the price to as low as it takes to sell. And 50 cents is probably not enough. It's probably around 10 cents a track, a dollar an album. Lossless could probably be priced 3-5 times higher.
DRM is shooting yourself in one of the two (and only two) legs you're standing on, convenience. It is a detriment to your existence as a profitable industry, so you have to kill it. Sorry, but 10 year olds have the tools and knowledge to crack it, it's not effective in the first place.
Now, $0.10/track is not going to support the music industry as it exists. The arcane contracts, massive promotions, and talent agents cannot exist any more. When you sign up with a label, you're getting a spot in their store and a couple of banner ads if either you pay for it, or they decide to comp you. It's going to end up like youtube, a vast ocean of random noise that occasionally creates a star. Radio stations will just play whatever is popular, not what they're paid to promote, except for very select few, huge acts.