[jrm4]

No, royalties are objectively not part of the marginal cost, by definition. Marginal cost refers to things that must be paid for before the thing is made. This isn't a "should," it's essentially a principle of "the science of economics" (which isn't always much of a science, but this one holds up pretty well over time.)

The one that doesn't is the bit about "how much value they derive from it." All sorts of real-life experimentation/psychology, etc shows that people don't much know or understand or generally follow this thing of "a person develops a sense of how much something is worth to them and makes purchases accordingly," I mean, a moment's thought reveals that if this were true, advertising (and perhaps, google and facebook et als entire business models) wouldn't exist.

I have idiosyncratic music preferences like you, but we much don't matter.