Digital Audio Insider -- the economics of music and other digital content

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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.

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April 12, 2006

Flaming Lips
by David Harrell
Flaming Reviews of the Flaming Lips
The new disc by the Flaming Lips, "At War With the Mystics," is a 12-track album available in two versions at iTunes. You can buy the standard album for $9.99 or a $12.99 version that includes three bonus tracks that aren't on the CD version of the record. But the distinction isn't clearly marked and many customers are overlooking it and then venting their frustrations about the "premium" pricing. Here are a few of the choicer comments:
steve jobs and co. have fought to keep the prices low. warner bros are to blame for this crazy price. ANYWAY, why would you pay FULL PRICE for a 128 kbps ACC that has limited copy restraints? buy the CD, get the art, get the full quality music, get no copy's a no brainer. sorry iTunes Music Store, this doesn't appeal anymore...

$13 is nuts. You can buy the disc for $13, rip it to your iPod, and still have the CD.

...I thought that was the whole selling point of iTunes - to charge less for the actual songs but not get the CD casing & art work... is stupid to raise the standard 9.99 price to $13...oh well I'll just go download it off limewire now.

I hope the large record companies are happy now that they are beginning to kill the golden goose (iTunes) by insisting that Apple charge more than $9.99 per album. No one in their right mind should download this intangible album for $12.99 (with restrictions on how they can use it) when they can purchase the tangible album for the same price or less...

Sorry but for $13 I want to own my music. Last I checked I wasn't getting album art, an actual CD or music that I can play anywhere. I'm getting digital tracks in a proprietary format. Screw you iTunes, I'm not buying this.

I've been a big fan of the 99 cent song and the 9.99 album but I'll be damned if I pay any more than that. Good things never last, greed conquers all...again. There is a reason peer to peer sharing became so popular...
Reading these comments about a perceived iTunes price increase, my first thought was that any actual across-the-board price increases for full-album downloads will result in a large-scale consumer revolt. Then again, maybe not. Convenience is no doubt a major factor in many digital download purchases. And you don't have to go above $9.99 to be paying a "premium" price for the download version of an album. Many albums in iTunes can be purchased new on CD for less than $9.99 and -- if you're willing to track down and buy a used copy -- almost all of them can be found for much less.

As a great post at Betty Rocker's Music Pantry titled "The Stuff We Can't Give Away" notes, many CDs are worse than cars at holding their value:
Mr. Rocker and I are doing a little CD Spring Cleaning in the Music Pantry and I thought we'd sell all the stuff we don't want (or have doubles on) at The stuff we're selling still has the plastic wrap on it and I'm hoping to get some good dough from the sales.

I was kind of surprised to see that over 60% of what I have to sell is not worth much at all. If a (currently popular) CDs is not sold within a year of their release, three years later, they aren't even worth the cost to ship! Kind of makes me feel bad for bands that were the "IT" band three years ago to come across a site like to find that their music is practically worthless to the consumer.
Given the availability of cheap used CDs, most download consumers are already paying a premium price to avoid the hassles associated with buying the CD and ripping it to mp3. Are they willing to pay an even larger premium? Maybe some of them are, but I think the "price of the physical CD" barrier (that is, the price of a NEW CD) will be a tough one to break through.


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