Steven Levy on price competition in digital music:
"...But the labels should understand that the nature of the digital world rewards price cutting much more than in the physical world."
Actually, I think this is one time when Levy is dead wrong - the evidence from micropayments suggests that, if anything, the digital world does NOT reward price competition. There are various reasons for this; my favorite is that unbundling reduces value for consumers in markets with heterogeneous preferences.
Will prices come down? Yeah - because no one built a new business model. Is it good for anyone? Not really.