The most profitable scheme would be
two-part pricing, with an "entry" fee and a low cost per song:
The most revenue, according to the 2009 survey data, would be generated by charging the students $21.19 for entry and 37 cents a song. This could raise the producer surplus by 30% compared with uniform pricing. Consumer surplus would also rise in this instance, because some people would buy songs they would have not have done at a higher uniform price. Spotify, a rival to iTunes, has a model somewhat like this for its premium service, where it charges a monthly fee for songs without limit.
However, it is interesting that these 'Netflix for music' models such as Napster and Spotify have so far failed to take off in any big way. Consumers still seem to prefer iTunes.
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