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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November 21, 2007

Wednesday Odds and Ends
by David Harrell
The Freakonomics blog has a Q and A with Jonathon Coulton:
Q: Do you think having music available for free will make releasing some of it on a traditional album more difficult?

A: It's always hard to figure out the actual numbers on this, but I definitely get the feeling that having a more open attitude with MP3s has contributed to my ability to actually make a living. More and more, people don't like to buy things that they haven't heard first, which makes perfect sense when you think about it. This is why they have listening stations in record stores (er, I mean, when they used to have record stores). And because I depend so heavily on word of mouth marketing, it's extremely important that it's as easy as possible to hear my stuff. Again, it comes down to the extremely low cost that comes with digital content -- it's okay if only a small percentage of listeners buy, as long as the number of listeners is very high. That can only happen if you let people listen.
Nick Carr takes exception to the idea that Amazon's new Kindle is the iPod for reading:
The market for digital music players existed in 2001 because the content for the players -- the digitally compressed music file -- was already ubiquitous. Thanks to Napster, millions of people had stuffed their hard drives with MP3s and had installed jukebox software to manage them. What was required at the time was a simple, stylish way to make all that music portable, with a seamless connection between the PC jukebox and the portable device's software. That's what the iPod-iTunes system provided. The DRM, or copy-protection, embedded in the files that eventually came to be sold through the iTunes store was a non-issue for customers because they had a ton of easily shared DRM-free MP3s that worked just fine on the iPod.

There is no big, readymade supply of content for the Kindle. It arrives in your hands naked and empty, and the only way to fill it (other than through a kludgey and largely useless process of mailing Word documents and photos to a special email address for an extra charge) is to buy fairly expensive books and subscriptions through the Amazon store.
While I agree with many of his points, there is one HUGE difference between music and books: We listen to our favorite tracks again and again, which isn't the case for most books. Hence, the fact that potential iPod owner already owned content for the device played a huge role in the iPod's success.

But do consumers really need to have a backlog of pre-existing content before embracing the ebook concept? If you're a reader, you're most likely acquiring new books at a regular rate, so compatibility with content you already own is much less important to the Kindle that it was for the iPod.

I truly have no idea about the prospects for the Kindle, but if consumers believe that Kindle content is reasonably priced relative to printed books (and can be convinced to pay $399 for the device), it might have a chance. Then again, it might be another case where consumers are happy to pay for the hardware, but have the expectation that the content to fill it should be free...

Finally, I had hoped to have the fourth of installment of the Digital Pricing Conundrum series up this week, but it's going to have to wait until after the holiday weekend. Check back for it next week and Happy Thanksgiving!


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    Out Now -- "Maybe Next Year" -- The New Holiday Album:

    <a href="">Joy To The World by The Layaways</a>

    "This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

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    <a href="">Silence by The Layaways</a>

    "The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

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