Well, just going by S3 rates, a 5MB song costs $0.0009 to deliver.

well it took years to build their fanbase with previous albums and touring; and I could be wrong but I think both recording an album and touring around the world have significant costs in both time and money which don't always result in fruition (big risk). Luckily it worked out for radiohead

That's why I was careful to specify marginal cost. What you're discussing is fixed cost.

you have me there - i just felt that you were making light of their fixed/sunk costs

[to be fair - I didn't specifically mention marginal costs in my arguments =) hehe ]

As well as create a successful startup. That's not the point.

It's a product not a service, so they work the same if their album is downloaded a hundred or a million times.