[marc420]

With regards to music, I know of bands that made a great deal of money by letting music be downloaded or traded for free. Then they make their money by selling concert tickets to the people who liked what they heard.

Ever hear of the Grateful Dead? In terms of concert tickets, they were annually either the highest grossing band in the world, or very near the top of the list. At their peak, they could easily sell out 80,000 seat football stadiums for multiple shows several days in a row in the same city, with little or no marketing or advertising costs.

What they did was early on they decided it was perfectly ok for fans to bring recording gear to concerts and record their shows. And that as long as these recordings weren't being sold for money or profit, that it was perfectly ok for fans to share and trade these recordings. So these recordings always circulated amongst their fans, and to friends of fans as an introduction to their music. When Mp3 and the internet came along, they were all freely available there ... as long as the websited didn't charge for them. You couldn't even have advertising on your site if you had their music up there. But if you just put it up for free and weren't making any money from it, the band was very happy to let anyone do that.

They also always kept their ticket prices near the minimum possible price. For someone who bought tickets to different bands that came around, the Grateful Dead usually ran at about half to two thirds the price of other shows. And they've never hit the triple digit gouge pricing of other shows ... unless its a charity benefit and even then that price usually includes a reception with the band before the show.

All of this sounds counter-productive ... give your music away for free, price your shows as cheaply as possible instead of as expensively as possible. It sounds crazy ... until you see 200,000 fans all trying to get tickets in an 80,000 seat stadium ... and again with almost zero costs in local marketing or advertising of the show. Because of the decisions they'd made that seemed very counter-productive, about all they had to do was to rent the stadium and haul their gear and crew around. Set up to play, then watch the people flow in and the money hit the till. That, combined with the fact that they produced amazingly good music, made those guys all very, very wealthy. (they also kept most the middle-men out ... they either were their own concert producers\promoters ... or they worked with people they knew and liked in different cities. Even today, they are one of the very few groups of musicians that still own the rights to publish their own music as audio, video or sheet music.)

The middle-men part might be relevant to this discussion. Remember, there's two companies that need to try to make money from your Dom3 purchase, not just one.

Just a note that there are other models for making money out there rather than "grab as much money as possible on every transaction". Don't know if that applies here ... just adding some thoughts that came to me while reading the discussion above.