After years of charging 99 cents across the board, digital music stores are implementing a three-tiered price structure for songs. iTunes is charging $17 or more for "passes" to exclusive content from Depeche Mode and the Fray. But in China, major labels are offering millions of song downloads for free through Google. We ask Greg Kot, Chicago Tribune pop music critic and author of the upcoming book "Ripped: How the Wired Generation Revolutionized Music," how the price of music is set. And marketing professor Priya Raghubir of NYU's Stern School of Business tells us about the psychology of such pricing.
Soundcheck blog: John Schaefer asks "What's music worth?"
Tell us: How much is music worth to you? Are you willing to pay $1.29 for a hit single? How about $2200 for a Prince coffee table book and iPod?
Soundcheck blog: John Schaefer asks "What's music worth?"
Tell us: How much is music worth to you? Are you willing to pay $1.29 for a hit single? How about $2200 for a Prince coffee table book and iPod?
Comments [20]
Part 2
But, most importantly the music industry and the musicians need to get with the idea that there has been a paradigm shift. Music is going to be bought digitally. I just bought Michael Gordon's "Trance". It was mentioned on Sequenza21. I bought it in mp3 right from B.O.A.C. Somewhere someone mentioned Mark O'Connor's "Americana Symphony", just out and already available at Amazon in mp3.
That is a far cry from Turtle Island's Love Supreme tribute to John Coltrane or Ken Field's "Forked Tongue", neither of which were headed for mp3. A little persuasion and mention of torrent downloads and both got done in under 48 hours from the last email.
This is the modern world.
Ken Fields and I just "discussed" this at my weblog, http://richardmitnick.wordpress.com. I said mp3's should be US$0.05 to 0.15. Ken protested that he could not make it on that. And, of course he is correct. I was trying to get up a discussion. But, "Lou Rawls Live", from what? 1965? Still over a buck a track. That is nuts. Same with "A Love Supreme". Nonsense. That is why there is The Pirate Bay. The music will not stop. People will pay a fair price, maybe US$0.75 per track for Ken, but no more than $0.10 for the Lou Rawls or the Coltrane. No one really wants to wait for hours or days for a torrent download.
The market will find its place.
Boy, do I wish I had been tuned in.
First, I use Amazon for mp3's. The quality id first rate coming through my Klipsch and Bose speakers which help my 68 year old ears.
John, you had on some time ago a New York City music shop owner. He sells LP's, CD's, and mp3's. He said on that show that quality was not the issue. The issue is lifestyle. The person with a full bore listening room might want LP's. The person in a smaller living space might want the easy storage of CD's. The very mobile person, the iPod type (or in my case the two 120 gig Zune type) will want mp3's.
Second, I never pay anything as outrageous as US$0.89 or 0.99. I buy significant compilations, Beethoven Nine Symphonies, The Who "Thirty Years of Maximum R&B". That was the best, 95 tracks for under US$40.00. Take that, iTunes.
En of Part 1 due to word limit
I have always thought the music industry missed the boat. When internet access became a possiblility, in the Napster era, it could have made sense to just attach a charge of a penny per song (now tthat might be 10 cents per song) as an absolute nomical download, so that people would not think twice about getting hundreds of pieces per month. With a global audience, the Philadelphia Orchestra or the estate of Louis Armstrong might do very well.
For me, I will be happy to pay for physical product that is well mastered-- They found the master tape, did not process it with noise reduction, and did not overly compress it to sound "modern". What's horrible is "remasters" that sound worse than the original edition. Downloads, while not preferable, must be DRM free for me to even consider buying them. They also work versus something being out of print entirely and not available. Marketing tricks, like Apple figuring out the only thing people really wanted were the Beatles unique mono mixes on cd, so those are what's in a no doubt expensive box set so you must buy them all, have to be weighed on an individual basis. For I-Tunes, .99 v 1.29 is a good trade for DRM free. A great deal of popular music IS disposable.
Here's my question. I'm having a party and want to give out compilation CD's as guest gifts. I've looked into paying for the rights on each CD -- but it's virtually impossible -- you have to write to each owner of each song (usually the songwriter) and ask for permission to reproduce it. Wouldn't the industry be served by having a clearinghouse site for such permissions?
It surprises me that these single-serving, a-la-carte sellers (like iTunes) are so popular. Instead, I prefer to pay a minor subscription fee (eMusic) and dramatically reduce the cost of individual songs, and spread my options among any number artists *without* someone else gaming how my price point by how popular a song is.
Mp3 should be free. It costs almost nothing to distribute and is inferior to the uncompressed CD format or vinyl. It is a free advertisement for the artist. Make money performing and selling hard and true copies.
most people, aka the punters, can barely tell the difference between 128k and 192k. Do you really think itunes is gonna give you 320k?
If you look at what is really selling these days, it is disposable r&b, pop, and hip hop.
Most of the kids buying this stuff will not be listening to it 2 years from now. Music has really become disposable to the masses. Itunes has little incentive to boost the quality of the releases. The real question is, now that they have gone 192/224k DRM-free, what will all the poor suckers that paid for DRM music do with their lame 128k collections?
Girl Talk did perhaps the greatest release I've ever seen. He provided a low quality free download, that allowed you to pay if you want, but also provided multiple additional options for escalating fees. Girl talk though can not be listened to in singles form in my opinion, nor can really any album be truly appreciated as singles, iTunes is killing the album. Also when purchasing from iTunes and music stores most buyers feel that the artists gets almost nothing compared to record execs.
there's a delicate equation of convenience, value, and morality, which itunes has come down on the right side of until now with the 99 cent songs. as the price goes up, the immorality of stealing the songs becomes less of a deterrent. as the digital rights management infringements increase, the same thing happens.
convenience and legitimacy only carry so much weight in the face of a shrinking music budget.
My preferred method of paying for music is Emusic, hands down.
I've used Amazon for my music downloads for years - I want nothing to do with ITunes restrictive practices.
(Amazon lists almost 6 million tracks available for download)
I pay 89c or 99c without hesitation - it's quicker and easier on my conscience than figuring out how to download it illegally for free.
I would not buy a track for $1.29 unless I REALLY, REALLY wanted it, so they restrict their sales by going over $1.00
For most albums I gladly pay $7.99 or $8.99 - that way they are on my PC in minutes.
i just wish that itunes would make their files available at 320k bitrate.
their insistence that you buy conveninetly small/inferior files demands a cheap price point.
as a dj, i regularly pay $2-4 via the various dj download sites. and it is well worth it to support those artists who make material worth buying.
but anything less than 320k is crap not worth paying for.
The main problem with free downloads is that they are consistently bad quality files. I would gladly pay to make sure I'm getting a good copy of the song, if only I could find the songs I'm looking for on iTunes. Specialty download shops like Beatport and Boomkat charge more for their downloads. Availability is the determining factor. iTunes should focus on getting more music of different styles and cultures rather than worrying about a few cents difference between old and new rock songs.
Have you heard of the website SwapaCD.com? You list your (legal) hard copies of CDs, and other users request them. Each time a member gets the CDs they requested from you, you get a credit. For fifty cents and a credit you then can request CDs from other members.
So basically, you get a legal hard copy of a CD that you can put in your iTunes and turn around and put back on to swap. Awesome way to declutter and to get super cheap legal copies of CDs.
Actually, Todd Rundgren pioneered the subscription model with his "PatroNet" website 10 years ago. Offering exclusive material, a peek behinds the scenes of songs in progress, etc. But for whatever reason, it was a flop. And if you know Todd fans, they are a die-hard bunch.
Personally, I prefer physical media, be it CD, LP or whatever. But I'm an old fogie.
How about AMAZON, still 99 cents for drm-free music as it has always been. btw, professor Priya obviously knows nothing about the music biz.....
Please discuss how pricing relates to classical music. The idea of splitting, say, a Beethoven 3-movement piano sonata into 3 individual "songs" makes me feel nauseous.
I would pay up to $20 for a real CD.
I bought a bunch of music on iTunes over the years. Now, I can't put any of that music on my new iPod touch, because I had already put it on 5 devices (my old broken iPods and MacBooks). I am locked out of music I paid for. Super sucky. I'm going back to CDs!
People will pay $1.29 for a bottle of water that's free in your tap. They'll pay even more for a pillow on the airplane that used to be free. So paying for something that's also free (if illegal) shouldn't be such an issue.
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