In which I speak to three different (semi-fictional) characters to try and look at the problem of selling music online from several different angles.
Steve Jobs hammers home the £1 per track dilemma
‘How do you make money from music?’ is an increasingly complex question these days, and one that I keep getting different answers to, even from myself. The ground keeps shifting, and the context within which making money from music can occur is altered almost by the day.
Like I always say — the music industry has not changed, it is changing. And it will continue to do so at an increasingly accelerating rate. Trying to anticipate a future in which things will have resolved themselves and a new model will dominate is as senseless as trying to keep doing what you’ve always done as the walls crumble around you.
I was in London the past couple of days meeting with a bunch of different people for a number of different reasons. While I was there, Steve Jobs was elsewhere, launching the 160GB iPod, and that sparked a number of conversations with a number of different people.
1) The music consumer
This was a conversation about a problem solved. The music fan had a reasonably large music collection, and was looking forward to getting a new iPod because the old one would only take a proportion of it.
She’d long ago ripped all her CDs at 128kbps, then re-ripped them at 256kbps when hard drives had come down in price. She also had a lot of tracks from the collections of friends, several albums that she’d picked up from filesharing sites (though never Limewire or Kazaa, apparently — those things were for people who didn’t know what they were doing).
And she had come into possession of a number of albums and a lot of tracks by different means — compilations made for her, CDs that she’d borrowed, ripped and returned… that sort of thing.
She had a few tracks that she’d impulse purchased at iTunes, but she couldn’t believe for the life of her that anyone would have anything like the number of albums she owned on CD, if they purchased them directly through iTunes or similar.
‘Nobody’s going to fill an iPod with Ã‚Â£20,000 worth of music. The record companies are dreaming if they think I’m going to be spending that much money — but my new iPod’s sure as hell going to be chock full.’
The recording artist
The recording artist I met with is someone who regularly sells 15,000 copies of an album. He’s pulled that off three times. They sell in Japan, America and Britain predominantly, and he has different licensing and distribution deals in each of those territories.
‘There’s no way I’m going to ever be able to make a sustainable living out of selling records’, he told me. ‘In fact, I’m facing a real problem with this new record, because I’ve got to tour it in order to sell it, and I just don’t think I can afford to tour it this time around.’
The artist’s conclusion was that he should still record albums, and he should still sell them to people who want to buy them, but that publishing was the way forward.
‘I’ll pick up scraps through the sale of recordings, but sync is how I’m going to have to be able to buy groceries. Sync, and the odd remix job’.
And the 160GB iPod?
‘Yeah… cool, isn’t it? I’ve been downloading masses of old albums that aren’t available for sale in any form. These things were never released on CD, they were deleted in the 70s, and they just don’t exist anymore. But there are these guys who have collections that they’re ripping off vinyl, tidying them up and putting them up on their blogs at 320kbps.’
‘I’d never have got to hear any of this stuff otherwise — and it’s like archiving them, only backwards. It’s making sure they don’t ever disappear by releasing them into the wild, rather than locking them up in a vault. It’s crazy how much amazing stuff is just not for sale.’
‘Yeah, some of it’s forgotten back catalogue of existing labels, but most of this stuff is orphaned. The labels don’t even exist anymore.’
The digital service provider
‘I’m not quite sure what to tell these people sometimes,’ confessed the digital service provider. ‘Most of my customers are record labels. They’re looking for ways to make more money per unit. None of them want to be told they should be giving music away.’
‘The Crimea seem to have done all right out of it, but how repeatable is that? How much longer is a band giving their music away going to be a newsworthy story? And how big a band do you have to be in order to make that work?’
‘I reckon you’d probably have to spend just as much money marketing a single that you’re trying to give away as you would marketing a single that you’re trying to sell.’
‘It’s interesting… you’ve been talking about the charts recently. I have to be chart registered, because my customers want to be chart eligible. A lot of them don’t stand a chance of ever coming close — I mean, we’re talking classical, folk and jazz recordings, not just pop — but still they don’t want to be denied that chance just for administrative reasons.’
I didn’t talk about the 160GB iPod with the digital service provider. I probably should have, because it makes the question even more difficult: what do you tell these people?
Selling individual tracks at a quid a pop does seem to fly in the face of reason in an age when 40,000 tracks will happily fit in your pocket. And yet, that’s what most people in the music business seem to want to do — whether it’s one copy to your grandmother, or a million in sales.
Bob Lefsetz is absolutely right to a point: a lot of customers would happily add a premium onto the price of an iPod to have it filled with the greatest albums of the 80s, or the history of jazz.
But they’d also want to leave some space to add more things. Nobody wants their music collection to be complete. They want to keep acquiring. But they don’t want to start from scratch and buy each individual track either.
A different answer each time
In amongst this, everybody on the other side of the equation wants to know the answer to the question ‘How do I make money from music?’
Unfortunately, the answer is ‘Well, it’s complicated.’
These days, the only way I know how to answer it satisfactorily is to sit down for a day with the person asking the question, get out a big piece of paper and start helping them figure out what their answer is.
And I seem to be doing that more and more these days.
Of course, If I ever stumble upon THE answer, I’ll post it here. Pull this lever, push that button, and success will follow. In the meantime, this seems to be the only way I can figure out to be more specifically helpful than the general discussions we have here on New Music Strategies.
Lucky I enjoy having those conversations so much…
The message I came home with was a reinforcement of the idea that basing a career in the music business on the sale of recordings alone seems destined to be if not a marginal activity, then just one strategy in a portfolio of approaches that must be tailored to each individual case.
An off-the-shelf solution consisting of an online brochure with a cash register attached just will not work.
For the music fan, music is not something that exists in discrete 4-minute units, but is instead collectively representative or indicative of something personal that is negotiated through the activity of collecting, organising and listening.
For the musician, recordings are one part of an ecology of strategies that only become apparent when you look at the whole game plan and figure out what it is you’re trying to achieve. No point focusing exclusively on something that doesn’t work quite so well just because that’s the way you’ve always done it.
For the digital distributor, a business is made out of helping people do what they say they want to do in the way they say they want to do it. You can guide and suggest for all you’re worth, but at the end of the day, you’re providing a service and the customer gets to be right. If the customer wants to sell individual songs for a pound, then that’s what the customer gets to do.
It strikes me that the fourth person I should have been talking to was the record label owner. Because the really interesting conversation starts when you present those separate realities and ask: ‘So what, then, do you do for a living?’
Although these conversations actually took place, they’re presented here as fiction. Similarities to any persons, living or dead, are quite interesting.