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Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.
My personal website has links to my LinkedIn and Google+ pages and you can send an e-mail by following the advice of a certain Scottish band.
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If you enjoy this site, please consider downloading a Layaways track or album from iTunes, Amazon MP3, Bandcamp, or eMusic. CDs are available from CD Baby and Amazon.
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January 27, 2012
The Right to Re-Sell Purchased Digital Contentby David Harrell
I've long believed that the pricing of digital albums, with the exception of the sub $5 specials at Amazon MP3 and the cheaper offerings in the eMusic catalog, too often fails to account for the loss of the potential resale value that purchasers of music CDs enjoy.
But from the details in this WSJ piece on Apple's foray into the digital textbook market, it appears that Apple is offering a substantial discount from physical book prices, one that is much greater than that of most digital music:
"It's nothing new," said Gonzalo Garcia, director of technology, marketing and communications for the South Kent School, an all-boys boarding school in Connecticut, though he said the "shocking news" was the $15 price. Currently, students pay $20 to $60 for a 180-day rental or splurge as much as $100 for a higher-end title.Meanwhile, ReDigi has responded to the complaint from EMI Capitol Records about the ReDigi marketplace for used digital music. (A PDF of the ReDigi response can be found here, along with a letter to the district judge who is overseeing the case.)
While I don't have enough knowledge of copyright law to offer any informed comments on the underlying legal arguments, I will say, that as a consumer, I'm philosophically in favor of the right to re-sell legally purchased digital content. And if that right is given up as we move from physical to digital content, the pricing of digital goods should reflect that concession.
related: The Digital Pricing Conundrum Part IV: The Loss of Resale
tags: digital music digital textbooks re-selling digital content ReDigi Apple AAPL
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January 19, 2012
One Quick SOPA Thoughtby David Harrell
I've mentioned it before, but the one thing that really struck me yesterday was the incredible power/platform that Google's homepage provides. It's something that has to be used sparingly, but Google can instantly air its views or promote a cause without spending a penny on advertising or lobbying. (Though GOOG does spend big bucks on the latter!)
tags: Google GOOG SOPA
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December 30, 2011
The Top 7 Digital Audio Insider Posts of 2011by David Harrell
The seven posts below generated the most page views, comments, and/or e-mails for this site over the past year. Thanks to everyone who read, commented, linked, and e-mailed. Happy New Year!
Spot the Spotify Payment
...the average streaming rate is small enough that it'd take 244 Spotify spins to equal the label cut of a 99-cent iTunes download. But the real question here, in terms of artist/label compensation, is what Spotify activity actually represents. That is, is it simply a new revenue stream, providing income from listeners who don't normally purchase music, or is there also a cannibalization factor, where some listeners opt for streaming over actual purchase? read more
A Few Thoughts On Pandora
Does Pandora's Music Genome-based programming give it a competitive advantage? That is, does it result in a better listener experience than with Internet stations like Last.fm, where "similar" artists are determined by listener overlap (listeners of artist A also like artist B), as opposed to song qualities? read more
The Downside of eMusic's Currency Pricing
Even after last year's subscription changes, average album prices at eMusic are no doubt less than the average prices at iTunes, Amazon MP3, and other digital music stores. Yet I believe that eMusic's switch from a credits system to currency pricing, in combination with Amazon MP3's $5 album deals and daily specials, presents a real challenge to eMusic's subscription-based business model. read more
How Much Does Rhapsody Pay Artists?
Here's how I'm paid for my self-released albums in the Rhapsody catalog:
1. A penny per stream. For albums distributed by CD Baby and TuneCore, I receive one cent per listener stream. CD Baby, which uses a commission business model, takes a 9% cut, resulting in a .91 cent payout per stream. TuneCore, which charges an annual maintenance fee for each album, passes on the full one cent. This one-cent rate has remained steady and unchanged from September 2004 to the present. read more
The Convergence of Owning Music and Renting Music
There are real differences, both logistical and psychological, between owning and renting music. But I'll bet that the preference for ownership will decrease as the listening experience for "owned" and "rented" music converges. read more
The Ethics of Downloading Music You've Already Paid For
An eMusic subscriber loses $200 worth of his downloads and posts this question to eMusic's message board: Is it ethical to download those same tracks from illegal sources (such as P2P sites)?
I was somewhat surprised by the responses -- by more than a 3 to 1 ratio, his fellow subscribers voted "no," most of them rather emphatically. Then again, maybe that's not surprising, as eMusic subscribers are a self-selected group of music fans who are willingly paying for digital content that they could probably download elsewhere free. read more
A Funny Spotify Experiment: Why Judas Priest Sounds Just Like Jerry Reed
The fact that the Spotify interface allows you to play tracks stored in your iTunes and Windows Media libraries made me wonder what happens when you use Spotify to "stream" a track you already own. From a performance standpoint, it makes sense for Spotify to pull the file from your hard drive. And doing so would also -- in theory -- relieve Spotify of any obligation to compensate the record company for that play, as the situation would be no different than listening to a track in iTunes. read more
tags: digital music Spotify eMusic Rhapsody
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December 28, 2011
Another Advantage for Googleby David Harrell
Something I noticed for the first time this morning -- Google is plugging its Android music market on its home page:
Given the number of page views, Google's ability to advertise on its main page gives it a huge built-in advantage for almost any market.
tags: digital music Google Music GOOG
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December 15, 2011
Christmas Layawaysby David Harrell
My apologies for the lack of recent posts -- I'm working on an in-depth piece on the economics of Spotify for next week. It'll address the cannibalization issue and the recent decisions by various acts and labels to withhold new material from the streaming service.
In the meantime, if you're in the mood for some seasonal music, please give a listen to "Maybe Next Year," the 2009 holiday album by the Layaways:
If you like what you hear, we're giving away a free download of O Christmas Tree and a free download of Silent Night. The full album is available at the usual digital outlets -- iTunes, Amazon MP3, eMusic, Bandcamp, and Android Music. And it's streaming on Spotify, of course!
tags: digital music the Layaways Spotify
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December 08, 2011
Thursday Odds and Ends: Digital Magazine Archives, eMusic Redesign, and Rumblefish and CD Babyby David Harrell
I'm no follower of fashion, but as someone who read every single issue of Rolling Stone in my high school library's archive from cover to cover, I'm intrigued by Vogue's new online archive:
The result is a pop-culture data mine covering 120 years of American desires and aspirations. More than 425,000 images, 300,000 ads, and 100,000 articles, dating back to 1892, have been fully indexed and are searchable.With an annual fee of $1,575, it's priced for business customers, not consumers. Will this sort of thing eventually become available for every magazine? I find it easy to get lost in the free Life magazine archive at Google Books.
The new site design of eMusic isn't drawing raves from subscribers, at least from the ones who are posting to eMusic's message boards. One commenter thinks the new design was actually optimized for the iPad:
Maybe I am reaching, but it looks like they want to make it presentable on the IPAD, but you can use it anywhere. Getting around the site is much easier on touch screen than by mouse.Finally, Rumblefish will soon make the entire CD Baby catalog available for licensing and will add 3.5 million CD Baby-distributed tracks to YouTube's AudioSwap library. While it's a new outlet for CD Baby artists not in the AudioSwap program, the influx of additional content means musicians who are already there will have more competition for placement. As I noted last summer, my band receives a very modest royalty payment every quarter for YouTube plays of our songs that have been "swapped" into videos like this one:
tags: digital music Vogue magazine archive eMusic Rumblefish CD Baby
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December 01, 2011
Some Details About the Google Music Store and Self-Released Artistsby David Harrell
One pleasant surprise: Google Music waives the $25 setup fee if an act is already included Google's database. (Thanks to Chris, who mentioned the fee waiver in a comment to my post at Hypebot.) The Layaways were already there, so I claimed the page for no charge.
Pricing Details:
Albums can be designated as "free" or for any dollar amount, as long as it ends in 49 or 99 cents.
Individual songs can be priced as "free," 49 cents, 69 cents, 99 cents, $1.29, or "album only."
You can edit album and individiual song prices after an album is published, but the changes aren't instant, as they are with Bandcamp. They do, however, appear in a few hours.
There's no need to enter a UPC barcode number for a release, or ISRC codes for individual songs. So, like Bandcamp, Google Music makes it easy to release collections of demos, live performances, etc.
Currently, Google only allows basic control over artist pages. You can add an artist bio, one picture, and links to your Google+ page (of course!) and other websites, but that's about it. At the album level, there's no ability to add descriptive text, press quotes or reviews, or album credit information.
Overall, the process was relatively straightforward and reasonably fast. I uploaded audio tracks and the artwork for the Layaways 2009 holiday album late Monday afternoon and it was available in the Android Music Market by Wednesday morning.
related: Google Music and Self-Released Musicians: What's In It For Google?, What I Like About Google Music for Self-Released Musicians
tags: digital music Google Music Bandcamp self-released musicians
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November 28, 2011
For Love or Money: Minimum Wage Musiciansby David Harrell
Digital Music News put a more negative spin on the TuneCore blog post I wrote about last week. Jeff Price of TuneCore responded over at Hypebot.
Instead of writing something new, I'm going to be lazy and quote myself, from an interview I gave to the excellent Fingertips music site two years ago:
"...other than government-funded stipends for every musician, I don't think there's a way to guarantee that all musicians will earn a living. I'm not arguing that musicians don't deserve a living wage, but it's a simple fact that -- and this is the case with any creative field -- you have more talented people than the market for their collective talent can reasonably support. And you've got more of them every day, as it's easy for anyone to release music today..."The vast majority of TuneCore-distributed artists aren't earning the equivalent of minimum wage from their music sales, but that shouldn't be seen as a slam on TuneCore. That's the situation for almost all musicians -- and that includes most well-known professionals. From this blog's 2010 interview with Jonathan Segel of Camper Van Beethoven, someone who has had more "success" than most musicians, yet has rarely supported himself on his music income alone:
"The financial breakdown of time, equipment, musicians, travel, merchandise manufacturing, etc. means that almost all 'professional' musicians you see, have seen or will see are basically hobbyists; their time and materials are almost never paid for by listeners. like 98% of them."tags: digital music musicians and minimum wage TuneCore
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November 23, 2011
TuneCore Releases Some Fascinating Sales Numbersby David Harrell
To combat the blog meme that "artists not signed to major labels do not sell music or make money," TuneCore posted a fascinating document on its blog -- a July 2011 sales spreadsheet for all of the TuneCore-distributed artists who earned more than $100 in digital music royalties for the month.
Clearly, some TuneCore-distributed artists have a lot to be thankful for tomorrow -- 60 of them had digital royalties of more than $10,000 for the month, with three of them breaking into six-figure territory:
A couple of thoughts:
1. Some non-major label artists are obviously selling a lot of music. Yet there's a wide range of "self-released" artists in the TuneCore catalog, ranging from folks who are recording themselves in their bedrooms using Garageband to ex-major label artists with serious management teams and backing. It's certainly possible that some of that former group is among those at the top of the list above, but I'd bet it skews toward the latter group.
2. TuneCore has approximately 600,000 artist accounts and just 5,938 made the $100 cutoff point for the spreadsheet, meaning that less than 1% of TuneCore artists earned more than $100 in digital royalties for the month. That's not surprising, given that the average TuneCore client earns $179 a year in digital music royalties.
That's not an indictment of TuneCore, but it's another example of something that applies to musicians on labels of any size, as well as those who are truly independent: While relatively few of them are successful when it comes to music sales, those who are can do quite well.
related: Stop the Presses: Most Self-Released Artists Earn Very Little from Digital Music Sales
tags: digital music TuneCore music sales
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November 21, 2011
Google Music and Self-Released Musicians: What's In It For Google?by David Harrell
As I wrote last week, as a self-released musician, I was happy to see that Google Music includes the option for musicians to add their material to its music store, without having to go through a distributor. I wish the same option were available for Apple's iTunes.
But what's the real upside for Google? Most self-released artists don't sell a lot of music (though some do, see the update below) and most music fans coming to the Google Music store for the first time won't be looking for such material. Also, even if this music were considered a necessity for the Google Music catalog, Google already has relationships in place with TuneCore and CD Baby, so there's little barrier to entry and much, if not most, of that self-released material will eventually end up in Google's catalog.
There is, of course, the $25 setup fee. If a large percentage of the combined client base of TuneCore and CD Baby (more than 860,000 artist/client accounts, based on figures released by the two firms), sign up for Google's Artist Hub service, it could mean millions in setup fees. Yet that doesn't seem like much money when you consider that Google's revenue for the trailing 12 months is more than $35 billion.
For Google, the biggest advantage in courting self-released musicians might be the greater enthusiasm, and in-bound links, that result from giving such artists control over their catalogs. As with Facebook and Google+, Google has entered another market where it must battle a dominant service, Apple's iTunes Music Store, in addition to well-established alternatives like Amazon MP3 and eMusic. Perhaps the musicians who use the Artist Hub service will be more likely to push their fans to the Google Music store via their websites and social media posts. And even if relatively little of this self-released music is ever purchased, anything that directs music fans to Google Music can't be a bad thing for Google.
UPDATE, 11/23/2011: While most self-released musicians aren't selling a lot of music, a small subset of them are quite successful, as revealed by the numbers in this post on TuneCore's blog. Sixty TuneCore-distributed artists received more than $10,000 for digital music sales for the month of July 2011, with three artists receiving more than $100,000 for digital music sales for the month. Still, Google Music doesn't need a direct relationship with these artists to have their material in its catalog, as TuneCore artists can opt to have TuneCore deliver their albums to Google.
related: What I Like About Google Music for Self-Released Musicians
tags: digital music Google Music GOOG iTunes self-released musicians TuneCore CD Baby Amazon MP3 eMusic
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Free Christmas music from the Layaways:
O Christmas Tree -- free download
Silent Night -- free download
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Popular Posts
A Long Tail Experiment
By the Numbers: Using Last.fm Statistics to Quantify Audience Devotion
Lala.com Owes Me Sixty Cents
An Interview with Jonathan Segel of Camper Van Beethoven
Price Elasticity of Demand for McCartney
Sony and eMusic: What I Missed
The Digital Pricing Conundrum series:
Part One Part Two Part Three Part Four
THE LAYAWAYS
Out Now -- "Maybe Next Year" -- The New Holiday Album:
"This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium
"Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs
O Christmas Tree - free mp3 lyrics and song details
Away In A Manger - free mp3
Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at Last.fm.
"...about as melodic and hooky as indie pop can get." -- Absolute Powerpop
"Their laid-back, '60s era sounds are absolutely delightening." -- 3hive
"...melodic, garage-influenced shoegaze." -- RCRD LBL
Keep It to Yourself - free mp3
All Around the World - free mp3
Come Back Home - free mp3
Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at Last.fm or Napster.
"The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music
"Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio
Silence - free mp3 lyrics and song details
The Long Night - free mp3
Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.
"These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover
Let Me In - free mp3
Ocean Blue - free mp3
Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.
More Layaways downloads:
the layaways website
Current/Recent Reading and Listening:
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It's written as a how-to guide for those looking to become music supervisors, but I found it to be a good resource for musicians (like me) who are trying to get their music used in movies, TV, etc.