Selling mp3s on the Internet cheaply will reduce piracy, according to Domenic Carosa, chief executive of Destra Corporation, the parent of mp3.com.au.

Whilst record sales are currently being affected by piracy, Carosa says it's because there is currently no alternative for consumers who want mp3s.

-Piracy is hurting sales at this particular point in time [because] there is no other option. If you want music in a digital format what options do you currently have? Piracy," he said.

Going back a few years, Carosa says record companies would slam the door in his face--they didn't want to talk to a company offering music for download, even if it was charging for it. However the same groups are now realising they have to go online if they're going to remain competitive.

-The record companies are changing their views, they're actually being a little more liberal... with relation to their licensing as well as their expectations of royalties," Carosa told ZDNet Australia.

He believes piracy can be reduced by making music cheaper. This will result in a boost in sales, and eventually a boost in profits.

-If they can sell music cheaply, no-one's going to bother pirating," he said.

But there's still resistance.

-They've been selling physical CD's, now [we're] trying to get them to cut up that CD into little chunks... their perception is 'we're only going to sell a little bit'," he said.

The companies are worried they'll only sell single tracks and not whole albums. But Carosa, who is trying to convince the record companies to allow him to sell their music through mp3.com.au on a retail and wholesale basis, says his customers usually buy four to five tracks.

An interesting lesson in consumer behaviour can be learned by observing shoppers on Destra's mp3 site. The cheap music, priced at 99c a track, sells a lot faster than anything else, regardless of the artist.

-This is old stuff like Frank Sinatra... people will buy it if it's cheap-ââ,¬"we've proven it," he laughed.

Carosa has plenty to laugh about. Destra started life as Sprint, which was back-door listed on the Australian stock Exchange for AU$16 million only a few hours before the tech bubble burst in the US. Since then, he has steered the company to EBITA profitability in the last quarter, with AU$1 million left in cash reserves. It never would have happened if Sprint had listed one day later.

-Someone upstairs must have been looking out for me," he said.

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