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The Shape of Things to Come: 5 Cents

Neeru Paharia, March 21st, 2005

This last Saturday, I was on a panel at the SXSW Music Festival entitled The Shape of Things to Come. On the panel were some industry legends including Sandy Pearlman and Peter Jenner (former manager of Pink Floyd).

The panel somehow converged around the idea of a 5 cent download, and how it would be a better model both economically, and socially. I wonder if anyone has drawn the demand curves to see where there’s more money. If marginal cost is close to zero, then you could have 1 million people buying songs for 1 dollar, versus 25 million people buying songs for 5 cents – maybe the lower price wins?

It did get me thinking that maybe we (or someone) should build a Creative Commons 5 cent download site. It could be a good test case, and it would also help artists get compensated. Of course, since all the works would be CC licensed, tracks could probably be legally traded noncommercially. However, if there was one central place with a good recommendation engine and user interface (not to mention good musicians), I bet people would go for it. Any takers?

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