Discuss giving specific examples of the key costs

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A record company is planning to launch an internet music service. The management is contemplating charging subscribers sh150 per month who will then be allowed to download 100 songs per month to a mobile phone. If the subscription lapses, access to the music will be lost. The quality of the file transfer is guaranteed to be high. Legal advice has been obtained to confirm that the arrangement is within copyright regulations. Royalties will be paid to recording artistes based on the number of times that a song is requested.

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Question 1: Discuss giving specific examples, the key costs which are relevant in guiding the pricing decision in such a scenario.

Reference no: EM132530111

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