I don't think it's a problem with $1.50 in absolute terms. It's $1.50 compared to $0.99 from other vendors. Artists have set the expectation that songs are worth $0.99 by selling them for that amount elsewhere.
FWIW, I don't buy a lot of music - I use free Pandora and put up with the ads.
"During those meetings it was Warner executives, not Jobs as is commonly thought, who suggested tracks be sold for 99 cents. At the time, many labels wanted to price tracks at $3.49 each. But not Warner.
“When we told Steve, he looked at us like we just gave him a gift,” Vidich recalls. “We knew we needed to alter consumer behavior in a big way. Below $1 was an emotional threshold for people. It became an acceptable impulse purchase.”
> I don't think it's a problem with $1.50 in absolute terms. It's $1.50 compared to $0.99 from other vendors.
Yes, but if you only have the $1.50 option for buying a song you supposedly love, it simply makes no sense to refuse because other places sell other songs for $0.99, especially considering the massive value for a measly amount of money you get either way.
FWIW, I don't buy a lot of music - I use free Pandora and put up with the ads.