"This summer provided a clue to further harnessing the force of digital nature. For three weeks, Real Networks tried to lure new customers by slashing prices to 49 cents a song and $4.99 per album. Since Real paid the full royalty load to the labels (almost 70 cents a tune), the company lost money on every transaction. CEO Rob Glaser says that the company did get new customers, but here's the real news: Real sold six times as much music and took in three times as much money."

"Lower [music] prices won't happen unless labels and artists agree to smaller royalty fees per song. But this version of the Monty Hall Problem isn't too tough to crack. Behind Door One is the money you can make by selling a million copies of a tune. Behind the other door is the money to be reaped by selling 6 million copies at half the price. Do the math, guys!"

"Forecast: Song Costs May Fall Like Rain"
Memo to music labels: lowering prices will get you more sales
By Steven Levy
Newsweek, Sept. 27 issue
http://www.msnbc.msn.com/id/6037780/site/newsweek/