But clearly, there are a lot of people in the marketing still paying $x. If there weren't, the music industry would be out of business. The pirates are actuall

But clearly, there are a lot of people in the marketing still paying $x. If there weren't, the music industry would be out of business. The pirates are actually inflating the prices. If piracy weren't an option, there would be a group of people who would pay $3 but not $4, and some that would pay $5 but not $10. The industry would figure out where they could get the most profit with the standard profit * volume equation. The price would settle lower on the spectrum. Instead, all of the price sensitive people have turned to piracy. So again, going to profit * volume, you find the sweet spot among the people who are less price sensitive. Clearly the albums end up being more expensive. Why compete for the people who want to pay $3 if they probably will just continue to pirate? You are cannablizing your sales among less price sensitive customers.