It turns out people like cheap/free things

I noticed this interesting statement tonight while reading this editorial column on possible directions for digital music:

Wired News: Who’s Killing MP3 and ITunes?
6. People love AllofMP3.com

There’s already a case study of what an MP3 store could look like: the Russian site AllofMP3.com, which people are still reporting access to, despite attempts to starve it of U.S. credit cards. Its popularity also indicates that digital music pricing should drop (a 10-cent to 25-cent per unprotected MP3 sounds about right to me).

(boldfacing, mine)

In case you’re not familiar with AllOfMp3.com, you might want to visit the wikipedia entry on it. The long story short is that it sells songs for less than $0.12 each and its legal operating ability in Russia is in dispute.
Whether or not you agree that this service is legal or illegal doesn’t really matter - let’s just focus on the 12 cents per song part part. iTunes charges 99 cents per song. A CD is about $16.

Now, let’s go back to the part of the editorial that caught my attention:

Its popularity also indicates that digital music pricing should drop (a 10-cent to 25-cent per unprotected MP3 sounds about right to me).

If I’m reading this correctly, it appears that it is being suggested that pricing of songs should be based on what consumers want to pay. But then, it’s proposed that the price should be 10-25 cents.

But wouldn’t the service be even more popular if the price were a penny? Just think of the volume.
Or even better yet - why not just price it for free? That’s be a huge hit!

I think there’s some opex that’s being overlooked here - but that’s just me.