How much should music cost?
When trying to get to terms with technological shift, often the best strategy is to question the question.
I received an email from the nice people at Music Tank — an organisation that puts on superb Music Industry events, predominantly in London. They asked me to their next seminar, and asked a simple question as a kind of straw poll. Think I had a simple answer?
They wrote:
Whether or not you are attending this think tank, we would be grateful if you could consider the following 2 questions posed by the event’s keynote speaker, Gary McClarnan.1) As a music fan, if your favourite band offered you the freedom to choose the price of their download, what would you pay for it?
2) iTunes have just employed you and your first task is to re-appraise the price of iTunes downloads. What would you charge?
To respond, hit the reply button, put REPLY in the subject field, and numeric answers only, please, to questions 1 & 2.
Of course, in order for me to answer a couple of questions like that, I needed more than just a few digits. I wrote:
Hi,
With the best of intentions — and sorry to be a drag — but neither of those questions actually contribute to the debate, or advance it beyond the mere quibbling over price point. The issue is far more fundamental than that: digital music downloads don’t adhere to the same rules of economics that apply to physical products.
There is no scarcity of supply, and nor is there scarcity of shelfspace — and consequently there’s more going on here for music business than “how much should this cost?”
Try something like “what does it mean that our company now has infinite stock of everything we have ever released, and overheads have dipped to near-zero?” — or “how do we replace the simple retail model of music-commodity-for-cash with an economic exchange that makes sense of the fact that music is no longer a tangible commodity at all?” — or “now that music is free (by a factor of 40:1 in 2006), how should we now make our honest livings as intermediaries between artists and music fans?”
They seem more sensible questions than just “how much further should we keep discounting what we do in order to hang onto every last vestige of a model that is well and truly on its way out?”
Oh, and if you must have a numeric answer then I’d go with 10p for now… but reduce it to a single penny per track once hard drive storage is typically in the terabyte range, and broadband speeds average in excess of 8Mb/s. Give it, say, three years.
If you want to hang onto the retail model, then all you can continue to do is undercut in the hopes that consumers will simply buy everything ever.
Sorry I won’t be in attendance on the 6th — but I’m sure that will at least help the day run smoothly. Enjoy.
I won’t be there — but if you can, perhaps you should be. Here are the details — and you should know that I have never come away from a Music Tank seminar feeling I had wasted my time. They are always recommended.
7 Comments, Comment or Ping
Jonathan Melhuish
How much should this blog post cost? A very similar question, surely?
Jan 31st, 2007
Jessie
I get what you’re saying, but there’s one point that confuses me - the statement that music is free. I understand that distribution, reproduction costs etc are nil, aside from some infrastructure like hardware and software for the end user, but what about production costs for the musician in recording the music in the first place?
Feb 1st, 2007
Dubber
Unlike the rest of this post, which is designed to be provocative and a springboard into debate, the statement that “music is free” is just an observation of fact — at least for the vast majority of online consumption.
Far more music was downloaded for nothing than was paid for online.
That’s not a statement of how I feel about whether musicians should be paid for what they do and be able to make a decent living at it, or whether middlemen like record companies and retailers deserve to get their fair share of that income. It is, instead, a plain, observable fact.
Actually, of course, I think they do deserve to make money. More than ever before, for more artists and labels than ever before — and I think that’s entirely possible.
But it does raise the question that no matter what you call it (’theft’ or ‘new audience behaviour’), to ignore this simple fact — summarised in the phrase ‘music is free’ — denies one of the defining realities of the new music economy, and blinkers us to finding any helpful new answers to the question of ‘How, then, do we eat?’.
Feb 1st, 2007
Jessie
Fair enough - I guess I was looking at it from the other direction.
Feb 6th, 2007
John B
Dubber
You’re wrong in saying that the normal rules of supply and demand no longer apply digital music.
They do. It’s just that we’re all a little unsure of what constitutes supply and demand these days.
We do know that it’s not a zero sum game. (The beverages industry is a good example of this – drink more Coke, drink less coffee, tea, beer, whatever. Proven fact.)
I have more music than I can ever listen to from a wide range of sources – I’ve got a couple of months worth on iTunes, a basement full of vinyl and CDs, I stream Last.FM and I can rip that all day long if I want to. I’ve got Dylan’s TTRH, I can get all the music I can eat from Hypecast plus stuff from guys like you and Jefito.
It’s all free from a marginal cost perspective and almost free from a time perspective if you use something like DownThemAll on mp3 blogs
That’s supply.
Where does demand kick in?
Right about when you start hearing stuff that clicks and you want to find some more of the same. Or when you look forward to Fridays for Jeffito’s Mixtapes and are prepared to go to great lengths http://youmustbefromaway.blogspot.com/2007/01/if-this-works-ill-be-well-pleased.html to avoid missing a single episode. Or the daily Wireless fix.
So am I prepared to pay for a tidal wave of music of – in some cases - dubious quality? No.
Would I be prepared to pay for someone’s work/taste/expertise/access in providing music I’m likely going to like and – even better – hear new stuff that’s going to excite me?
Probably.
So the demand is going to be for service –selective aggregation, taste guru, Good MP3 Guide, referral service or whatever you want to call it.
You don’t want to drink bad wine (or beer) any more than you want to have to wade through bad or mediocre (same thing) music.
Which is why there’s a plethora of Good Pub/Beer/Restaurant/B&B Guides.
Why do I navigate religiously via the Good Beer Guide? Because I’ve determined that it’s never let me down and I wouldn’t expect it to in the future.
I’m quite happy to pay full retail for the book and – if they put up the price – I’d STILL buy it.
So how much to pay for your music?
Have a look at Library Thing http://www.librarything.com/blog/2007/02/how-much-do-you-want-to-pay.php
Seems like a fair way of doing things – you set the price that you’d like to achieve and find out whether the market agrees with you as to the value of the service you’re providing.
How do the artists get paid? They don’t directly. They benefit from people like ourselves being pointed specifically in their direction by the Taste Gurus of this world and they set their own prices for their own delivery service (if they’re indie). Or they get signed up on the basis of market place demand.
Feb 14th, 2007
John B
Another analogy…
You work at Cadbury’s and cane eat as much as you like. At some stage, you’re past gluttony and - despite the fact that everything’s free - you’re craving for a bar of Amedei Chuao - 70% cacao and £5 for 50g.
Of course you’re prepared to pay the money for something that special…
Feb 14th, 2007
Matt @ Kurb NZ
Good points. I like this.
Jun 9th, 2007
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