Well, the product could be easily pirated. Charging a fixed, high price for downloading the song would mean that they are focused on profits. But since it's up to the customer, then it will:-
1) Generate more sales = more customers = more people listening to the music = more exposure, and if songs are good = more fans = more concert tickets sold OR more media coverage, etc.
2) And in turn, drive more people to buy or download the songs and generate more profits. Also, there will be more sales for the CD/discbox.
For bands, it's more about long-term branding, high visibility and long-term profits than short-term profits.
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