I think the price of albums on iTunes is too high.
Here in the UK, they are usually about £8. I think if they were generally £5, sales would rise a lot, leading to greater profit all round. The same with films.
It would also encourage people to buy an album more often, rather than individual tracks. I often just buy a few tracks because it's cheaper, but if the album only costs slightly more, I’ll be more tempted to buy it. I think the usual £1 for a track is fine.
There are different behaviors and motivations, of course. A lower price will certainly encourage some people to spend more on music than they already spend, but others will stick to the same budget, regardless - so they'll get more songs for the same money. Others will buy the same number of songs/albums they always have, and pocket the savings.
And even when a lower price temporarily stimulates sales, over the long term people tend to fall back to their regular "appetite." That happened in the years after Amazon introduced the Kindle. At first, many people reallocated their hardcover book budgets dollar for dollar, and some spent more (lower price = lower inhibitions). Eventually, most fell back to buying only as many books as they could reasonably expect to read - they found other ways to spend the savings.
I buy very little music because for me, it's a habit that once started, can be a very slippery slope. I have a very long list of music I'd
like to have in my library - thousands of volumes. In my case, I'm willing to spend $9.99/month to have access to a library far larger and diverse than I'd ever be able to own. Possession isn't all that important to me.
My average spending on music is much less than $9.99/month, so the record industry will come out ahead. Others might spend more than $9.99, so the record industry loses. For most people, though,
if they subscribe (whether newspaper, cable TV, health club membership) they end up spending more than they would have when buying a la carte. The psychological barrier posed by each of dozens/hundreds/thousands of buying decisions has been eliminated - we're down to a single buying decision, at the start of the subscription. After that, one must take action to stop spending, rather than take action to spend.
