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?
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:
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.