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.

My personal website has links to my LinkedIn and Google+ pages and you can send e-mail to david [at] thelayaways [dot] com.

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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 28, 2009

Wednesday Odds and Ends
by David Harrell
When I reviewed Bandcamp last year, one of my few complaints about the platform was the inability to incorporate it into your own site or domain. That's no longer the case -- Bandcamp now supports custom URLs.

Some eMusic subscribers discuss purchasing the CD versions of music they've already downloaded from eMusic. I'd just add that if financial support is the motivation, depending on where you buy the CD, it may not put as much in the pocket of a self-released artist as the eMusic download did.

And the new Layaways album just showed up on Lala.com. I posted a couple months back that Lala is paying out approximately .55 cents per free play, but have yet to see any details on how it compensates labels and artists for its 10-cent web songs.



tags:

link 0 comments e-mail listen to the Layaways on Spotify




January 26, 2009

No More Pepsi Points for Amazon MP3?
by David Harrell

Amazon.com mp3 banner

Not sure when it happened, but it appears that purchasing mp3s with Pepsi Points is no longer an option in the Amazon MP3 store. (I recall seeing the promotion within the past two weeks...)

Update: My memory is clearly slipping -- the promotion ended on 12/31/08. Joel West at Seeking Alpha thought it was a success:
This was Pepsi's (PEP) second effort to seed digital downloads, following its earlier cooperation with Apple's iTunes Music Store. With its 2003 press release and a 2004 Super Bowl ad, Apple (AAPL) and Pepsi announced plans to give away 100 million songs, but only about 5 million were redeemed. A second promotion (twice as big) ran in 2005, although both the first and second contest allowed cheating.

Both the original Pepsi promotion and the 2008 successor were effective with me. In the most recent case, I signed up with Amazon (AMZN), installed its downloading application, and bookmarked its webpage for weekly "MP3 Deals."
tags:

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January 23, 2009

Friday Fun: 6-4-1-5
by David Harrell
One chord progression -- countless hit songs:


Via ChordStrike.

0ops -- had the one and five transposed in the original post title. Now fixed.

tags:

link 0 comments e-mail listen to the Layaways on Spotify




January 22, 2009

Apple's 8-K Filing
by David Harrell
One detail not mentioned in today's WSJ article about Apple's most-recent 8-K filing (and other Apple-related news):

The "Other Music Related Products and Services" category (defined as "iTunes Store sales, iPod services, and Apple-branded and third-party iPod accessories") now accounts for approximately 10% of Apple's revenues. (9.9% for the last quarter, 10.5% for the previous quarter.) Revenue from that category also topped the $1 billion mark for the first time last quarter.

You can read the filing here.

tags:

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January 20, 2009

CD Baby Physical and Digital Sales for 2008
by David Harrell
Another great CD Baby message board post: New president Tony van Veen provides a breakdown of 2008 physical and digital sales. The former were up slightly, while that latter saw strong growth in 2008:
Total DD revenues for 2008 were $25.4 million, compared to $17.4 million in 2007, a very strong 45% growth rate. That broke down as follows:

iTunes payments:
2008: $20.9 million
2007: $14.9 million

Payments from all other digital partners:
2008: $3.3 million
2007: $2.2 million

Download sales on cdbaby.com (albums only):
2008: $1.3 million
2007: $365,000
In total, $34 million + was paid out to artists, translating into an average of $228. Van Veen also notes that 200 CD Baby artists had sales in excess of $10,000 for the year.

I was mildly surprised to see that iTunes sales still account for more than 80% of digital revenue. While that percentage is probably close to overall market share for iTunes, the last time I checked, eMusic sales accounted for more than a third of the digital revenue for my own band. (Given that eMusic's subscriber base is a self-selected group of indie music fans, I've long thought that eMusic revenue for CD Baby artists should exceed the market share percentages.)

Read the full post here.

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January 15, 2009

Some Details on DRM-Free iTunes and New Pricing
by David Harrell
From a CD Baby bulletin board post -- a few details on the new DRM-free iTunes tracks and the upcoming three-tier pricing system:

Apple will pay 20 cents from a "30-cent upgrade" from a DRM track to the DRM-free version to CD Baby-distributed artists. (CD Baby takes a 9% cut from the 20 cents, paying 18.2 cents to artists.) I'm assuming the payout rate is the same or similar for labels with direct deals with Apple.

Tracks distributed by CD Baby that are already in the iTunes catalog will remain at 99 cents unless the artist/record company requests a change. CD Baby distributed artists can opt for any of the three price points -- 69 cents, 99 cents, or $1.29.

No new options for album pricing -- $9.99 remains the default for albums with more than 10 tracks -- but my guess is that setting the per-track price at 69 cents would result in a $8.28 album price for a 12-track release.

CD Baby is reportedly working on way for its artists to include digital booklets with their iTunes albums.

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January 14, 2009

Wednesday Odds and Ends
by David Harrell
Discmakers has the story of an act that Myspaced its way to weekly iTunes sales of more than 1,000 tracks. (With total sales of more than 100,000 songs, according to the band's website.) The band then signed a deal with Universal. My first thought was "why sign with a big label if you're doing that well on your own?" before realizing that full-time Myspacing leaves little time for recording or touring. Still, I can't help wondering if they will make as much from that major-label deal as they could as a self-released act or with a 50/50 deal with an indie label.

Some music promoters debate the relative merits of MySpace and Facebook for music promotion.

Black Rebel Motorcycle Club self-released a digital-only noise/ambient album in November. They're selling it for $6, your choice of 192k mp3 files or WAV files, though apparently not both. Pitchfork didn't love it.

And, in case you missed it, you can now follow Digital Audio Insider on Twitter.

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January 09, 2009

Amazon MP3's Best-Selling Free Album: What Does It Mean?
by David Harrell

Amazon.com mp3 banner

As Hypebot, Chris Anderson (author of the Long Tail and the upcoming Free), and others have noted, the album at the top of Amazon MP3's top selling releases for 2008 is a "free" album -- Ghosts I-IV, by Nine Inch Nails. (To be precise, the first nine tracks are available free from the NIN website, though the entire album was released under a Creative Commons license that allows for free distribution via file sharing networks or other methods.)

So is this proof of the public's willingness to pay for free music?

It is, in the case of one bargain-priced album by one already well-known artist (who also received a ton of attention and press for offering a free album). Ghosts I-IV has been priced at $5 since becoming available for paid download on Amazon back in March. My hunch is that the album wouldn't be sitting at the top the year-end chart if it were selling for $9.99 or more.

Amazon MP3 customers appear to be extremely opportunistic, taking advantage of the Amazon's one-day specials (where you'll often see $1.99 albums) and weekly $5 deals. (See yesterday's Coolfer post for a recent example of a $1.99 classical album moving 21,000 units in a week.) Many of the albums on the top 100 chart were priced at $5 for the entire month of December, and no doubt some of them were also daily or weekly specials at some point during 2008.

What I'd really love to see is the average price paid for each of these albums in 2008. Amazon.com folks: I know that a couple of you are regular readers, so if anyone has any details to share, I'd love to hear them.

Of course, the really big question here is still unanswered -- is there a price elasticity of demand for music, and can the music industry increase total revenue by selling more for less? That is, are the purchasers of these bargain albums simply pocketing their savings, or are the discounts encouraging customers to consume more music, spending as much or more money on recorded music than they would at standard prices?

The only published study I know of didn't reveal any such elasticity. But as I wrote last year, perhaps the discounts in the study (a drop in wholesale CD prices from $12.02 to $9.09) simply weren't enough to stimulate any increased consumer demand. If a price elasticity of demand actually exists, maybe the $5 album is enough of a discount to reveal it.

related: Price Elasticity of Demand for McCartney

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link 2 comments e-mail listen to the Layaways on Spotify




January 07, 2009

Wednesday Odds and Ends
by David Harrell
To me, it has always seemed like the best way to make money in the music industry is to simply extract it from aspiring musicians.

Here's one more example: David Fagin of the Rosenbergs breaks down the numbers of MySpace's pay-per-click ad program and concludes that it's virtually impossible for a self-financed band to make money with it. (Via Broken Record).

Some eMusic subscribers debate the merits of different file formats -- mp3, FLAC, and WAV.

And an interview with Richard Jones from Last.fm (via Duke Listens):
What does last.fm have planned for the future?

Ooh, well, some more of the same. We're expanding onto a lot of different devices now; that's been a bit of theme recently. We're on the iPhone, we're looking very seriously at an Android app, we're on the Sonos, we're on the Logitech squeezebox, and we're on more devices than we can keep track of. We're trying to make sure that wherever you listen to music, Last.fm is there, and you'll be able to scrobble the songs that you listen to.

One of the things we hear from users is that once they start using Last.fm, and once they start scrobbbling their music tastes, they feel like it's a waste if they actually listen to music on a system where they can't scrobble it. We're trying to make sure that Last.fm is available everywhere.
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    THE LAYAWAYS

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

    <a href="http://thelayaways.bandcamp.com/album/maybe-next-year">Joy To The World by The Layaways</a>

    "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.



    album cover art from The Space Between

    <a href="http://thelayaways.bandcamp.com/album/the-space-between">Keep It To Yourself by The Layaways</a>

    "...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.



    album cover art from We've Been Lost

    <a href="http://thelayaways.bandcamp.com/album/weve-been-lost">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

    "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.



    album cover art from More Than Happy

    "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:

    download the Layaways at eMusic download the Layaways at iTunes

    the layaways website