Proposed Record Industry Fix: Sell Songs for Five Cents

by , 4:00 PM EST, March 9th, 2005

A former producer of the Clash turned academic scholar has proposed that songs should be sold online for just 5 cents each. While the likelihood of such a plan ever being adopted is slim, Sandy Pearlman has spoken to Apple on at least one occasion about his idea.

Mr. Pearlman employs basic economics to explain his concept. In 2004, an estimated 25 billion tracks were illegally downloaded, a figure that dwarfs legitimate sales. Lowering the price of a song to 5 cents would attract millions of additional buyers, he says, which will likely diminish the number of songs illegally downloaded. Five cents, after all, is better than no cents.

Mr. Pearlman presented his concept at the Canadian Music Week conference in Toronto last week, The Globe & Mail reported. The plan further calls for a powerful, central, and easy to use place for users to access songs, probably something Google could create or an adaptation of the iTunes Music Store. He further suggests that a 1% sales tax should be levied on Internet access and new computers, with revenues going to the music industry (similar to a tax Canada had up until recently on blank CDs).

Acknowledging that the plan is a long shot--record executives handidly shot it down when they heard it--Mr. Pearlman added that perhaps Apple and other major Internet companies should simply buy up the major record labels.