$40k to fill an ipod?

Holy fuck, 40 thousand bucks to fill my ipod (im thinking an 80gig) and i was over here thinking that 99 cents a song from the itunes store was pretty cheap, and boy was i wrong. I read this article about how one third of PC users turn to lime wire because 1 its free, and two, it obviously wouldn't make much sense spending that type of money if your that much into music. This is what the article said. (courtesy of arstechnica.com)

"Pop quiz: what music and movie downloading app is installed on over one third of the world's computers, according to a new report from Digital Music News and media tracking specialist BigChampagne? The answer isn't iTunes, nor is it any other DRM-encumbered media program that has been blessed by Big Content. The answer is LimeWire, with a presence on an estimated 36.4 percent of the world's PCs.

Clearly, the so-called "darknet" remains far and away the world's leading provider of online media content, drowning legit download services in a flood of "free." This data also should give the major labels pause in their ongoing attempts to convince Apple that $0.99 per song is way too cheap.

The labels may be tempted to take comfort in the report's other finding that, as prevalent as LimeWire is, its uptake has been virtually flat over the past year. But a recent report on nighttime P2P traffic levels found Bittorrent to be the dominant P2P protocol, suggesting that either BT clients are even more popular than the already ubiquitous LimeWire application, or that BT users download more and/or larger files.

Between LimeWire and Bittorrent, the ongoing and extremely widespread popularity of P2P as a media delivery vehicle suggest that music prices remain stuck at too high a level while the capacity of portable media players continues to balloon. Does anyone remember the iPod launch, when there were jokes about how it would cost a user a few grand to fill up an iPod at the iTunes music store? Now that number is well into the five figures for a current-generation iPod, a fact that forces users to turn to other sources of digital content if they're to come even close to filling their iPods.

And when I say "filling iPods," I do mean the iPod specifically, and not portable media players generically. Unlike non-Apple DRM offerings from movie and music providers, LimeWire happens to be 100 percent compatible with the most popular media player on the planet. This has to be a factor in its ongoing popularity—it's a free alternative to iTunes for users who just want that single or bootleg NOW, or who don't care that it takes 45 minutes to put together a complete album plus artwork at a decent bitrate.

Update: I just want to make a quick update in response to some of the more inane comments in the discussion thread, and note that the idea on which this article is premised, i.e. that a thriving gray or black market in a particular commodity is evidence of overpricing (typically from a monopoly or cartel) in the legit market, is pretty uncontroversial in economics when applied to things like drugs and non-union labor.

So I don't really understand where there's a lot to disagree with here, at least from the standpoint of basic arithmetic. I mean, gray and black markets aren't really about morality--they're about simple supply and demand.

Black markets typically carry with them a certain amount of cost for participants (i.e. the lack of government sanctioning makes contracts hard to enforce, increases risks, exposes participants to legal liability, etc.), so they're by no means "free." (This is why I put "free" in quotes in the article).

People, as rational actors, make a calculation, and they're willing to incur those black market costs when they're priced out of the legit market.

So this isn't about the "morality" of "stealing music" or any other such sentimental silliness. It's about old-fashioned supply and demand."