The following is a Question and answer between Terry McBride and Allison Kwan from New York University:

• Q) You believe in selling music as water. How do you foresee that the pricing model will work in such a model (ie. Will it match the subscription based services already available or will it follow more of a cable television model)? Do you feel that paying for music as a utility will conceal the price elasticity of consumers and diminish the market value of the music?
  
  
• A) Water is sold in many ways to match the consumer demand. Music will be the same. Like obtaining from a tap, there is a subscription which is sold as a set monthly fee or on-demand. There is also the bottled variety; from flat, to bubbly, to designer. The latter being the studio album, including acoustic versions, live versions, and remixes .... it is no longer about "units", but about "songs".
  
  The fear that price elasticity will deflate the value of music is just that - a fear! There is free music all around us and there has been for decades, yet we gladly will pay for what we love, so the fear is simply unfounded... and funny enough, it is the same fear that had the Music Industry fighting to not allow music on the radio. It took an act of Congress to force a compulsory license.
  
  
  
  
• Q) You mentioned the Oberholzer/Strumpf study which showed that file sharing had no effect sales. Do you have any suggestions to curb online piracy so that the industry can entice and gain revenue from those that are illegally getting their music? What is the best way to battle with free illegal online services?
  
  
• A) This is simple: "Give Up Control" .... How? Well, the music on CD's is "open source" so why not allow the music sold digitally to also be open source. Meaning, when a consumer buys a song it works on any mp3 player, computer, phone etc. When this interlope happens, the price becomes king. Consquently, you will see major retail accounts selling music at a discount (like they do with Cds now) and you will start to see 50¢ single tracks and sub $7 albums.
  
  What does this have to do with competing with "Illegal" or "free"?... well, free is not free (although Illegal still is Illegal). When looking for music, it takes time to find the songs you want. From P2P networks, the actual download, cleaning them up, re-labelling, etc. This isn't accounting for the many corrupt files, trojans, spoofs, and viruses. Naturally, it will get to a point where it is cheaper to purchase the music, than to find it for free. Potentially, you could make more per hour working at McDonald's than illegal file sharing. As you can see, free equals time and time is valuable - not free :-)
  
  
  
  
• Q) You mentioned that 40% of sales at Nettwerk were digital. How has the digital revolution impacted your company and the way it operates? Do you find that the revenue and artist exposure outweighs the cost, personnel and time needed to diversify into different formats?
  
  
• A) This is an opportunity to market and promote a greater knowledge and awareness of the brand of the Artist. Each artist is so different in nature, that is important to have the capability to reach each one. This is the only way we can promote the true essence of the Artist's brand. For example, all of the Artist's Nettwerk works with have social causes and these causes are quite varied, yet they are such a intricate part of them and the message they convey. We are now able to target that awareness to where it can strike a chord.