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How much would you pay for a digital album?

With reports that 95 percent of all digital-music downloads are unauthorized, free copies, David Carnoy asks the question: how much are people actually willing to pay to go the legal route for acquiring music?

When you hear about the music industry these days, there are often figures claiming that digital music downloads--led by new initiatives from the likes of Amazon, Nokia, MySpace, and, of course, Apple--are up year-over-year by more than 25 percent, and now account for about 20 percent of overall music sales. But let's get the numbers straight. Despite some bright spots, the vast majority of digital downloads are unauthorized and cost nothing. In fact, a recent report by IFPI, a body that promotes and "safeguards" digital music, says that in 2008 a whopping 95 percent of all music downloads were illegal. Sure, IFPI has an interest in perhaps inflating that stat a bit, but judging from what I've seen out there, I'd say it's still a very high percentage.

No difference: U2's upcoming album No Line on the Horizon will likely cost the same as a CD or digital download--and that doesn't make sense. Wikipedia

You've probably heard about how the Recording Industry Association of America (RIAA)--and now IFPI--are strongly encouraging ISPs to police digital downloads and bring pirate networks to their knees. There's talk of throttling bandwidth and even more draconian measures, which a lot of consumers aren't too happy about, especially ones who don't like their ISPs to begin with.

All that said, let's pretend for a moment that in some highly improbable scenario, someone or something manages to get pirating totally under control and people are left having to pay for their music. Would sales suddenly take off? Would all be well again in the music industry?

Probably not. The problem is--and has always been ever since digital downloads emerged--that the digital stuff is way too expensive, and that's made a lot of folks feel the music industry is out to rip them off (in other words, there isn't a whole lot of sympathy for music companies). It certainly doesn't help matters that the economy today is in the crapper and the prices are largely unchanged. (Just look at Apple's recent announcement on price changes for its iTunes Store).

Now, I'm not saying anything new here. Plenty of pundits have said the music industry is broken and is just trying to eke out the last bit of good revenue from a few star artists in a shattered business model that ultimately needs to be completely blown up.

In the past, I've argued for a subscription service for iTunes and a number of we editors here at CNET are fans of Rhapsody, which charges a relatively affordable $12.99 a month to rent all the music you want (2 bucks more to move it on and off your Rhapsody-compatible portable music player). But there are still plenty of people who want to own their music. Some still buy it legally and a lot of so-called purists still buy CDs. (Call me old-school, but I have to admit that if the price is equal or close, which it often is, I prefer to pick up the physical disc over the digital album. Then I convert it to digital and throw the CD into my 400-disc CD changer).

I'm not going to get into a full-blown discussion of what will turn dishonest downloaders into honest buyers. As many of you are already aware, a lot of people don't think downloading music amounts to stealing. I've seen plenty of message-board posts from users saying that downloading free tunes isn't thievery, since it's just bits and bytes you're grabbing; and besides, they wouldn't have paid for the thing anyway, so it's better for the artist that they were exposed to their music. This column isn't about that (feel free to add your own comments, however).

What I'm asking is simply this: Those of you who rarely buy music--what would you be willing to pay for a digital album (or single)? In other words, what price would make you change your view of the music industry and make you want to open your wallet a little more?

I'd be a lot happier with $4.99 for a download of a new release and anywhere from $1.99 to $2.99 for older releases. Singles should be $.49.

Now, if you're an Amazon user, you may have noticed that it's recently had some special "Daily Deals" on digital albums such as $4.99 for Coldplay's Viva La Vida and $1.99 for its older albums and Prince's Purple Rain. Meanwhile, Nine Inch Nails' Ghosts I-IV is permanently priced at $5.

Word is that some of these specials are loss-leaders for Amazon that are simply designed to get people buying digital music. But that's not the way it should be. U2's upcoming No Line on the Horizon is available for preorder on CD for $9.99. The digital version will likely be priced within a dollar. (Some $9.99 CDs cost $8.99 as an MP3 download on Amazon). Instead, I think it should be $4.99 to download at launch. I mean, an eco-friendly band like U2 should want its fans to go digital and not buy any sort of physical disc and paper and plastic packaging. To encourage that, Bono should tell the band's label, Interscope Records, to price the digital version significantly lower. Am I wrong?

What do you guys think?