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 20, 2007

Tastes Great or Less Filling?
by David Harrell

Starting sometime next month, you'll be able to buy 256k sans-DRM EMI tracks from iTunes for a premium price of $1.29 for individual downloads.

The unanswered economics question here is how do you value the two separate improvements? That is, consumers who purchase (or upgrade to) the new tracks will pay 30 cents more to receive the benefits of better sound quality AND the lack of DRM. But how much of the 30 cents is each benefit worth?

It's something a trained economist could surely ferret out, but -- off the top of my head -- I'll venture that the improved sound quality is probably worth far more to most iTunes customers than the lack of DRM. First, there's already a workaround to the DRM issue (burning a track to CD then re-ripping the file to mp3) but you can't improve the inherent sound quality of a 128k file.

Second, for all the grousing about DRM systems, I'm guessing that for the majority of iTunes customers the dislike of DRM is really more philosophical than practical. When you've already demonstrated your willingness to PAY for something, it's ironic that you're then saddled with restrictions that you could avoid by opting for the free versions available from P2P networks. And the idea that you can't freely transfer something you "own" to any portable player is irritating.

Yet the current iTunes DRM probably isn't causing too many problems for most customers -- you can already transfer the tracks to five computers, unlimited iPods, and burn as many copies to CD as you want. The biggest issue is no doubt the inability to directly transfer tracks purchased from iTunes to non-iPod players. However, until more devices support the AAC format (Microsoft's Zune is a notable exception), the new premium iTunes downloads won't help here. So it's not a bold assertion to say that buyers of the new premium downloads will mostly be paying up for improved sound quality. (For single tracks, that is. If you purchase the entire album, you'll get the 256k files for the old $9.99 price.)

But if 256k files are really what you're after, you don't have to wait until May. Buy.com already offers 256k files for most of its top 100 tracks, at the bargain rate of just 79 or 89 cents a song. And this isn't indie music -- you'll see the same major-label tracks that populate the top 100 tracks over at iTunes, and not just EMI releases.

The catch, of course, is that these are Windows Media Files with DRM and are completely incompatible with the iPod....

tags: iTunes iPod Apple AAPL Buy.com

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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

Where The Conversation Ends - free mp3
January - free mp3
Keep It To Yourself - 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