Everything you write makes sense, but only in a world where music prices aren't set by psychotic rights owners. Regardless of market influences and reduced cost of distribution, the majors demand ~$0.70 per track. This is why major label mp3s cost $0.79-$1.29 just about everywhere.<p>When you have that baseline which you can't control, profiting from a discounted mp3 album isn't really possible. Costs of distribution are lower, but they exist. Your profits can quickly become costs unless you stay at the standard pricing levels.   <p>I cite these prices based on what I've seen working at a music startup &#38; based on others' summaries; i.e. <a href="http://daringfireball.net/2007/09/more_amazon_mp3_store" rel="nofollow">http://daringfireball.net/2007/09/more_amazon_mp3_store</a><p>I'm definitely <i>not</i> arguing that it should be this way, but describing the status quo.