Why Are CDs Cheaper Than Digital Downloads?

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Last night I decided to buy a bunch of old-man albums from my youth that I’ve never gotten around to getting before. But old man though I might be, I am 21st century in my listening habits. I don’t need a bunch of CDs cluttering up my house, just digital downloads. And yet, I ended up with a bunch of CDs winging their way to my house.

Why? Because out of a dozen purchases at Amazon, the audio CD was cheaper in all but one case. And about half the time, the audio CD included download rights. So I was buying a CD plus a digital download for less than the price of the CD alone.

Can anyone explain this? I know Amazon has some weird pricing policies sometimes, but this seems even weirder than usual. They could have saved themselves both warehouse picking/packing time and shipping costs if they’d priced the digital a buck less than the CD, rather than the other way around. Possible explanations:

  • Most people consider digital files a convenience they’re willing to pay for. It saves them the time of having to rip a CD.
  • License rights something something something.
  • I was a subject in a large-scale study to find out how irrational consumers are.
  • Amazon is so used to losing money they just don’t care.

Any other guesses?

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