I don't think you can honestly rationalise it like that.
You could similarly rationalise selling an iPad for $2,000 by 'We have a bajillion engineers, who all went to top schools after decades of non-stop education, who worked 80 hour weeks to refine every single component of this, who tested 100 different chamfers for this edge, who polished it, who ...'
The price of something should absolutely be dictated by how much the target market is willing to pay for it (and that includes ease of purchase etc) - otherwise people simply won't pay. For music, that is one of the reasons why you have so many people whining about how much piracy there is; their target market simply doesn't think that their music is worth the amount they want to charge it for.
The consumers may be incorrect, but it doesn't change the fact that the sales will be smaller because of this.
Music is frequently expensive to produce, but the sale price is largely independent of that. If you consider production costs alone, an orchestral recording should cost many times that of a band, due to its many times greater investment (an orchestral musician will be vastly more technically talented (after 2+ unpaid hours of practice per day for all but a few years of their life) than almost any band musician) and smaller market.
Meanwhile a live recording should cost almost nothing, as it can be produced simultaneously (and frequently is) released immediately after the gig.
The price is the same, because that's roughly what people are willing to spend on music.
I always thought that the initial 99¢ per song in iTunes was partly influenced by the fact that people usually give $1 bills to street musicians (at least so they do here in NYC).
If you can pay 100¢ for a 3-4 minutes of street performance, can't you pay 99¢ (or less) for 3-4 minutes of a high-quality recording which you can listen to as much as you like?
I think that's apocryphal; https://news.ycombinator.com/item?id=9961530 suggests so anyway. The cause is probably the same; $1 is seen as an irrelevant amount of money by most people.
Even so, you compare very different things, and the result is not terribly informative.
I think the fact that music is so easy to get for free makes it difficult to assess what value people would place on it if that outlet wasn't there. Surely some portion of the pirates would pay for the music they're torrenting if it wasn't available for free.
The specific reasons for how people place value on music aren't hugely relevant; all that should matter for the label in most cases is maximising the total revenue (as for digital downloads the marginal cost is irrelevant).
You could similarly rationalise selling an iPad for $2,000 by 'We have a bajillion engineers, who all went to top schools after decades of non-stop education, who worked 80 hour weeks to refine every single component of this, who tested 100 different chamfers for this edge, who polished it, who ...'
The price of something should absolutely be dictated by how much the target market is willing to pay for it (and that includes ease of purchase etc) - otherwise people simply won't pay. For music, that is one of the reasons why you have so many people whining about how much piracy there is; their target market simply doesn't think that their music is worth the amount they want to charge it for.
The consumers may be incorrect, but it doesn't change the fact that the sales will be smaller because of this.
Music is frequently expensive to produce, but the sale price is largely independent of that. If you consider production costs alone, an orchestral recording should cost many times that of a band, due to its many times greater investment (an orchestral musician will be vastly more technically talented (after 2+ unpaid hours of practice per day for all but a few years of their life) than almost any band musician) and smaller market.
Meanwhile a live recording should cost almost nothing, as it can be produced simultaneously (and frequently is) released immediately after the gig.
The price is the same, because that's roughly what people are willing to spend on music.