That hypothesis is not supported by my model of economics.
Price is largely determined by the marginal cost to produce a good, and by the consumers' willingness to pay for it.
If demand is such that consumers are not willing to pay more than the marginal cost of production, the good is simply not produced. Firms with the highest costs drop out of the industry, one by one, until the remaining suppliers can make money again.
Music isn't exactly a fungible commodity, but it's close enough. There is a powerful substitution effect, at the least. If people think $1.50 per track is expensive, then guess what? If you can't sell a track at a lower price, you're going to go out of business. If you drop your quality to lower your costs, then guess what? Consumers will adjust the price they are willing to pay based on that lower quality.
So your implication is backwards. Bargain-barrel quality yields bargain-barrel prices, not the other way around. Lower price expectations yield fewer products on the market, and the survivors will generally have the highest ratio of quality to price.
The musical skills really only come into play when price expectations rise high enough that new entrants to the market can be supported. If people were willing to pay $2 per track, you would need those skills to cash in. The skill requirement is a barrier to entry, not a cost of production.
Price is largely determined by the marginal cost to produce a good, and by the consumers' willingness to pay for it.
If demand is such that consumers are not willing to pay more than the marginal cost of production, the good is simply not produced. Firms with the highest costs drop out of the industry, one by one, until the remaining suppliers can make money again.
Music isn't exactly a fungible commodity, but it's close enough. There is a powerful substitution effect, at the least. If people think $1.50 per track is expensive, then guess what? If you can't sell a track at a lower price, you're going to go out of business. If you drop your quality to lower your costs, then guess what? Consumers will adjust the price they are willing to pay based on that lower quality.
So your implication is backwards. Bargain-barrel quality yields bargain-barrel prices, not the other way around. Lower price expectations yield fewer products on the market, and the survivors will generally have the highest ratio of quality to price.
The musical skills really only come into play when price expectations rise high enough that new entrants to the market can be supported. If people were willing to pay $2 per track, you would need those skills to cash in. The skill requirement is a barrier to entry, not a cost of production.