October 23, 2007

If the print and online editions were complements -- the demand for which rise or fall in tandem -- then a newspaper's online pricing strategy would be pretty much a no-brainer: it would give away the online edition in order to expand print readership and harvest an added source of ad revenues. But the fact that the two products are substitutes complicates the strategy. If you rush to set the price of the web edition at zero too early, before online ad sales reach a certain level, you may sacrifice revenues from print sales and ads without making them up through online ad sales.

October 19, 2007

Every company meeting revolved around Snocap. Every employee had to be trained in the endless FAQ about Snocap. For the last 8 months, the CD Baby office has felt like a Snocap office. All we were doing, all day long, was dealing with Snocap issues.

Then the sales reports came in. $12,000 total sales for the 8 months they'd been active. Since we keep a 9% cut, that's $1080 for us, total. Ouch.

October 16, 2007

Classical music, with its thousand-year back catalogue, has the longest tail of all. In Naxos's case, thirty to forty per cent of its digital sales in the U.S. come from albums downloaded four times a month or less. Thus, a not insignificant portion of the company's revenue comes from titles that, by Justin Timberlake standards, don’t exist.

October 15, 2007

October 10, 2007

Why the variable pricing?
It's fun to make people stop for a few seconds and think about what music is worth, and that’s just an interesting question to ask people.

How would you respond to complaints about the sound quality -- that 160 isn't a high enough bitrate?
I don't know, we talked about it and we just wanted to make it a bit better than iTunes, which it is, so that's kind of good enough, really. It’s never going to be CD quality, because that's what CD does.

October 09, 2007

It's pretty much the perfect bitrate from their perspective: high enough that it won't be really crappy, but low enough that the music nerds will definitely shell out for the CD when it comes.

October 04, 2007

In the past most people didn't much like or listen to most of the music they bought, or in any case most of the value came from their very favorites. A relatively small percentage of our music purchases accounted for most of our listening pleasure. So if people can sample music in advance, and know in advance what they will like, music sales will plummet. This will be a sign of market efficiency, not market failure.

1. Music fans use the money they've saved by not making purchasing mistakes to buy a greater quantity/variety of music they actually like.

2. Music fans use the money they've saved to pay MORE for the music they really like.

October 02, 2007

I'll give a public and detailed account soon. For now, just know that the ending of the relationship between CD Baby and Snocap was our idea, and done for your benefit (as well as our sanity).