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The comments about MP3 downloading on the previous post got me thinking. “Free” is everyone’s preferred price for music. But nothing ever truly comes free. Illegal downloading, while free of monetary cost, has other costs (“search costs,” in economics-speak). There are risks, however small, like prosecution and viruses. There’s lack of control over what one gets; one is at the mercy of whatever bitrate and encoder the original uploader chooses. If the uploader added incorrect ID3 tags or omitted them altogether, one expends energy to rectify that. P2P file-sharing requires downloading software which takes up computing resources. Finally, there’s time. Granted, the cost can be little. Those savvy with search engines can find virtually anything available for download. But the search can be a pain. The ideal time to get something one wants is “now.” If the price were right, people might prefer to buy instead of illegally download.
Assuming an optimal album download (DRM-free, high bitrate, artwork and lyrics included, instant checkout), at what price would you choose a purchase over an illegal download?
Maybe a fixed price per album isn’t the way to go.
Albums on iTunes typically cost $9.99 each, with individual tracks costing $.99 each. Amazon’s MP3 store charges around $8.99 per album and $.89 or $.99 per track. But fixed rates don’t really work when albums have very long or very short tracks. For example, Trees’ Light’s Bane, which we reviewed here, is two long tracks totalling 27 minutes. On Amazon, it’s underpriced at $1.98 (!) because each track costs $.99. Southern Lord, whose catalogue has many long tracks, has dealt with this problem by negotiating slightly variable prices (in increments of roughly $.99) based on track length – Sunn O)))’s Black One is a good example. However, Amazon doesn’t seem to dip below its $.89/$.99 norm for extremely short tracks. Agoraphobic Nosebleed’s Altered States of America crams 100 tracks into 20 minutes, yet each is priced at $.99. (One “saves” $89.02 by buying the whole album for $8.99.) The notorious Russian site allofmp3.com (which morphed into mp3sparks.com) had a pricing scheme based on bits downloaded – the longer the track, the more expensive it was. This was more equitable, though labels/stores might prefer a fixed price per track/album for ease of accounting.
Would an ideal MP3 store have fixed pricing per track/album or variable pricing based on track length?
I think the right pricing model is probably more complex than that. Amie.st varies prices according to demand, which is also important. I’m not going to shell out $10 for an album by a band I’ve never heard of, because the lead single is good.
What’s “right” for consumers might not be what’s “right” for labels. Amiestreet has a very interesting pricing model that lets the market decide the cost of a record. I’m not sure if labels are going to go for it (the bigger ones, at least), because they might get almost no profit margin with those crucial first week sales you pointed earlier. But, lower costs usually mean higher volume, right?
However, someone pointed out that, paradoxically, the more expensive an album is on Amiestreet, the more likely people are to download it, because of perceived quality.
The pricing scheme of Amiestreet reminds me of Megabus – start free, then go up with demand. Megabus seems to be thriving.
I used to use allofmp3.com all the time. I found their method of estimating cost per track by file size to be the best. You really got your money’s worth. You could opt for their standard 192 bit rate for a couple bucks an album, or pay a few extra for better quality. The Amazon model definitely seems to short change albums like Light’s Bane.
The right price for digital = anything reasonably cheaper than the physical counterpart. While I have paid $10 for downloads when I could’ve bought the CD for the same price, I’d spend FAR more money on downloads if the mp3 albums/EP’s were always $3 – $5 cheaper than a physical copy would be. I’d also spend far more on downloads if old bands/labels were to start selling rare and out of print material via iTunes or Amazon sans DRM for said reasonable prices. I’ve said it before, but can you imagine how awesome it would be and how much money would be made if every old obscure 80’s metal album ever released was on iTunes for like $5 – $8 total? Easier said than done, of course, but… just think about it!
The problem with talking about pricing models is that for many people, the right price for a digital file is zero.
How about $20 for a digital album and they mail me a t-shirt? Or a vinyl record, or a cd, or a ticket to see their club gig, or a voucher to buy a cheap ticket to their arena gig?
I’d pay $15 for a digital version of the new Motorhead if it came with a Lemmy bobblehead.
Bands and labels can do lots of things to bring in some money while helping to build a bond with real fans who will be with them for the long haul. Southern Lord is already doing it–why aren’t other labels?
megabus would do even better if their drivers weren’t such assfucks that i’d refuse to ride in them if they payed me. the number of times i’ve seen them recklessly endanger their passengers and every driver on the road, i swear.
um, back on topic –
I would love to see backcatalogs online. it should be a goldmine for labels, especially those that have their own online stores (warp/bleep, who originally promised to put up their backcatalogs, only to start taking down albums before they finished).
the perceived value thing (cumulative advantage) – i see that as an advantage of the pricing model. tastemakers get to try the album out cheap, and their recommendation plus the rising apparent value will drive the sales of an album that’s worthwhile.
I think Dan has the right idea with bundling things that aren’t music. Community participation is the key element here, and that’s what labels should fear they’re losing, not merely CD sales. If fans aren’t engaged in the music, e.g. going to concerts and such, then the music will die.
In terms of what I’d pay, $10 for an “album” is way too high. I can remember when CDs were around that. That’s bullshit, because you don’t need to ship files all over the country with rising gas prices.
I want FLAC. Is that hard to understand? I would pay $2-5 for a good number of CDs. For the greats, like an Opeth or an Ayreon release, I would pay easily $30-50, and send a case of beer on top of that, provided it came with loot and swag.
The basic problem is that people aren’t proud to own most of the music that’s out these days. Major label “artists” aren’t something that one really wants to support. They don’t inspire.
This, of course, is in stark contrast to Reznor et al.
I agree that bundling physical product with downloads could be a good move. Right after Dan made that comment, I discovered the Menace Ruine release I wrote about yesterday paired a CD and downloadable album for the price of one item. I think a T-shirt would make an even better bundle. CD’s and downloads replace each other somewhat, while people can’t download t-shirts. More importantly, they’ll always buy and wear them = free advertising for bands and labels.
“Pride” in owning music is a concept possible only with smaller labels, I think. As it stands, the major labels have no interest in cultivating artists that foster community beyond marketing/social networking buzz. They’re just in it for the numbers. Which is fine – that’s their business.
But that also means that solutions for smaller labels might not work for larger ones. A metal label can bundle a t-shirt with a download, and that will mean something to its audience. I’m not sure if that solution will work for, say, Lily Allen or Lil Wayne.
Additionally, the point of the digital revolution is saving costs. If a label pairs a physical item with a digital download, it still has to deal with the costs of manufacturing, storing, and shipping that item.
David Byrne and Brian Eno just released an album on the web. The whole album is streamng on their site and there’s a free mp3 single. You can buy a 320k no-DRM mp3 version for $8.99 and they’ll throw in a FLAC version if you want it. It comes with a 17-page digital lyrics booklet. You can get the digital version and a CD mailed to you (in ten weeks) for $11.99, or a special version with a hardbound book, screensaver, four extra tracks, and other stuff for $69.99.
They understand that a large chunk of their potential fans aren’t going to pay for a digital file, and they’re willing to meet them on their terms.
If Anti were doing this with Enslaved they’d have my $11.99 right now. Throw in a t-shirt and I might go $30.
There’s no reason that a major couldn’t do the same thing. I agree that majors are just in it for the short-term numbers and don’t have any interest in helping bands to build long-term fanbases and develop careers. That doesn’t mean that it’s smart business for them. They need to stop trying to come up with ways to milk money from the old system and accept that the world has changed. They don’t have a manufacturing/distribution monopoly anymore. Radio and video don’t break bands anymore. They can’t really run the game like they used to. It’s over.
Maybe we’ll see labels replaced by companies who help bands with web promotion, merch, touring, and recording in exchange for a piece of all of it. I don’t know. I think in the long run it will be good for bands.
That digital lyrics booklet is KEY. I am sick and tired of getting digital releases that obviously required a lot of effort in terms of encoding and adding ID3 tags – why not just throw in a .txt file with the lyrics? Or better yet, .jpgs of the liner notes? It would take a second to do. And wouldn’t have me searching all over the Internet for lyrics and production details.
Re: power shift, I am mostly in agreement. The marketing power that dollars can buy is still meaningful for certain artists. There is no way interest in Metallica would be as high as it is right now if some marketing team weren’t flooding the Internet with Metallica news every 15 minutes.
Re: labels, I have actually had the same thought. Physical music is the only media that’s becoming obsolete. People are still more than happy to buy other merch. Labels should perhaps reconfigure themselves as merch companies and use album downloads as advertising for such. They could simply shift costs from CD production to merch production.
More generally, labels need to drop their traditional roles as such and focus instead on brand development. Nike sponsors Tiger Woods; Relapse sponsors Pig Destroyer. There’s still monetary value attached to endorsement by a known, respected quantity.
Here’s my take–it’s always difficult to have the best of every world with MP3’s.
I use Nimbit, where you can set your own price, as opposed to ITunes, which makes you charge 99 cents per song (Nimbit also takes off less, I think it’s 20 percent per track, as opposed to 30-35 or something like that that ITunes does).
One thing that someone pointed out to me is that labels and bands have always made the album available and tried to push it over singles, because they usually win that way…or at least, it makes the risks and the other songs possible to do. With a singles world, there’s often no need (or not the perceived need) to buy other songs than the one or two or three that you already know that you like, so bands and labels often lose out, because there would be no need to offer the album ending track that may be a slow grower and a 10 minute epic and spending that studio time and all the manufacturing costs on pressing and whatnot, to make it available to the listener. There’s always those risks inherent for bands that record album oriented material, instead of singles oriented material….but we’re dealing with people’s time, and I respect the fact that not everyone has the time to sit down and listen to an entire album anymore and figure out what it is that works for them.
But it is important to realize that the band has already spent that money in rehearsing in rehearsal spaces, recording time, mixing/ mastering time to make it available to audiences that *may* want to purchase it. If most audiences only buy one or two or three songs, that makes making entire albums risky for bands, and at some point, I think that pop music will revert back just to the single, if it hasn’t started to be that way already. On top of that, to push an album with 12 songs or something like that, and (traditionally speaking) only releasing maybe 3-4 singles, maybe 5, means that the other songs on the albums are serving less importance than they may have in the past (pending that people listened all the way through to decide for themselves what was their favorite “non single”, much like “Stairway To Heaven”–never released as a single–was).
And there HAS been some albums where there’s only been that many good songs on there, but the thing is about albums is that alot of bands offer some diversity in sounds, to allow the listener to choose what it is that they like from the remaining music. Without that incentive for bands to offer full albums to take their creative muse past just singles and the singles mentality of immediacy, you’re less likely to have bands taking risks on musicality and pushing themselves.
I’ve wanted to put out an album that consists of one 40 or 50 minute song, but I was wondering how that would work with the digital thing, because a buck wouldn’t be realistic. I believe that ITunes, you HAVE to make individual tracks available, you can’t just offer the entire album. You can offer the entire album purchase with the option to buy only one song if you like; but the opposite isn’t true, and something tells me that album oriented bands (ie: Sleep’s “Dopesmoker/ Jerusalem”) aren’t going to like it too much.
As someone who strives to offer album oriented material, it’s a bit of a struggle to offer just a “chapter” of the book, but people don’t necessarily have the time to listen to full albums these days. And i’ve never really liked the quality of MP3’s–as a producer, 320 KBPS still imparts data compression that I don’t like. And MP3’s are worthless; you can’t even sell them at the used cd store.
Ryan, I too lament the “death,” perceived or real, of the album. Metal, especially, is album-oriented as opposed to singles-based. I agree that in the end that giving consumers the choice is best. Give people what they want, and charge for it – what the industry has done wrong is not give people what they want.
I disagree that MP3’s are worthless. The whole point is that they aren’t physical objects. Yes, they have no resale value, but their value to a purchaser is portability, convenience, adequate sound quality. People obviously are willing to pay for that. And in the future, when everything’s streaming on-demand, MP3’s will probably be obsolete, too.
In my experience, physical recordings still outsell MP3’s maybe 10 to 1. It may be different in the future, but I think that there’s a certain audience that puts a value on liner notes and packaging and things like that, but then again, this is at a more ground level. It may differ for others, though.
Streaming is an interesting thing. Because if you look at YouTube and MySpace, i’m pretty sure that their stock audio stream is at 128 KBPS, and that’s most likely because it will eat up the least amount of bandwidth, and will load quicker and more reliably for a wider variety of audiences.
My only worry there is that along with alot of the problems inherent with downloads (mistagged songs, etc), that people get accustomed to that inferior MP3 streaming sound online. Some listeners download alot in 128 KBPS (and some *bands* even only offer 128 KBPS downloads on ITunes, because it downloads/ uploads faster for fans).
I’m also worried, as a sound engineer, about what passes for the “real thing”–ie: if people don’t know that they’re dealing with MP3 soundfiles that are in reduced sound, they may perceive the recordings to be much worse sounding than they actually are. I’m not sure if everyone can hear it, but even at 192 KBPS and a bit at 320 KBPS, I can hear some mild flanging artifacts on the files, and the decay of reverbs and transient sounds–especially of the high end variety (cymbals, etc)–definetely aren’t there yet.
FLAC might be an option, but the whole interweb thing has to upgrade all their systems, and it may require the audiences to do the same (some still listen and stream and/ or download on computers that are older and slower).