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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March 26, 2009

A Multi-Track Pricing Strategy for iTunes?
by David Harrell
This bit from the L.A. Times story on the imminent changes in iTunes pricing caught my eye:
Crupnick said he doubted a 30-cent price increase would prevent iTunes customers from buying a hot new release from artists like Kelly Clarkson, Flo Rida or Lady Gaga. He noted that offering a discounted second track packaged with a premium priced song from the same artist could boost sales.
The idea of charging consumers less for subsequent single-song downloads is something I first proposed back in 2006 in an early post on this blog:
But here's an idea for a twist to the variable strategy, one that might be better for all involved parties -- labels, artists, iTunes, and consumers -- than a simple price increase for all new material:

Allow variable pricing for individual songs based on purchase order. That is, charge more for the first track a customer downloads from an album, but then charge that customer less for additional downloads from that same album.

If, as far as the major labels are concerned, the "cherry picking" of individual songs is the evil downside to online digital sales, then, in exchange for a higher profits on the first song or two purchased, they might be persuaded to accept lower profits on further purchases from that album, along with a different pricing structure for older albums.
I don't know if the "discounted second track" idea was just speculation on the part of NPD's Russ Crupnick, or if he has some inside information about Apple's pricing plans. But if such a plan were implemented, it would both take the sting off the price increase that will be seen for some tracks in the iTunes catalog and encourage the purchase of multiple tracks from the same album.

related: The Digital Pricing Conundrum Part III: A New Idea for Variable Pricing

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March 23, 2009

New Quarterly Subscriptions from eMusic
by David Harrell

eMusic banner

No press release yet, but eMusic has added two quarterly plans (90-day plans, to be exact) to its subscription options:
60 Quarterly -- 60 downloads for $19.99

100 Quarterly -- 100 downloads for $24.99
The pricing is much more favorable than the monthly plans.

The 100 quarterly option would give a subscriber 400 downloads over a 360-day period for $99.96 or 25 cents a track. But the closest equivalent monthly plan, eMusic basic (30 downloads every 30 days for $11.99) gives subscribers 360 downloads in the same time period for a total cost of $143.88 or 40 cents a track.

There's a similar disparity between the 60 tracks per quarter and 20 tracks a month plans -- the quarterly plan works out to 33 cents a track while monthly subscribers pay 45 cents a track.

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March 11, 2009

Pitchfork Goes LaLa
by David Harrell
This might have predated the new site design, but I just noticed that Pitchfork has embraced Lala.com: In the "best new tracks" section, songs are streamed with Lala widgets and the buy links at the top of each album review now include Lala.com. (Previously, there were only links to Insound and eMusic.)

Lala.com's an interesting case. As with Rhapsody, Napster, and Last.fm, it offers limited free streams of the songs in its catalog. And you can share songs or albums by embedding a music widget on a blog or website. (In theory, you only get a single Lala stream of any individual song, but if a song appears on multiple albums you can stream the different "versions," even if they're the exact same track. You could also embed a track or album on a web page and then clean your browser's cache after each listen to hear individual songs multiple times.) As is the case with the other sites, the streaming of a song results in a small payment to the artist or record company. But unlike the others, the revenue share isn't coming from ad revenue, as there are no ads within the Lala.com widgets or on Lala.com itself.

So where is the money coming from? While there are no ads on the site, Lala.com sells 10-cent "web songs" as well as 89-cent single-song mp3 downloads, mp3 albums, and CDs (which come with free web songs). Evidently, Lala.com is subsidizing the free streams in hopes that they will lead to increased site traffic and music sales. Given the margins on recorded music, it seems like an ambitious goal to compete with services that use ad revenue to pay (or at least partially pay) the artist compensation costs associated with free music streams.

As a music fan, I hope it's a viable business model. Lala.com is now my first online destination when I want to hear something that I don't own or have easy access to, and it's also becoming my first choice for embedding my own music.

related: The Latest from Lala: The Return of the Dime Store, The New Dime Store, Part 2

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March 09, 2009

Monday Odds and Ends
by David Harrell
I missed this when it came out -- an eMusic press release from January, touting the "Long Tail" download activity of its subscribers. Unlike the research of economist Will Page of PRS (PDF), which found that the majority of 13 million online tracks had not sold a single copy in the past year, eMusic says that approximately 75% of the tracks in its catalog were downloaded in 2008.

A couple years ago, I did my own quick analysis of eMusic download activity and found that tracks from 53% of the albums in the eMusic catalog had been downloaded during the previous month. It was a different measure (albums with downloaded tracks vs. individual tracks) than eMusic's, but the numbers seem compatible with eMusic's findings.

The PRS website has a nice archive of some of Page's other research and analysis -- topics include the 1,000 fan theory, "In Rainbows" and the displacement of P2P traffic, and lots of other good stuff.

The "daily special" Amazon MP3 price for the new U2 album appears to be semi-permanent. The album is still selling for $3.99 as of this morning.

Finally, thanks again to all streamed tracks or purchased downloads during last week's pledge drive -- I really appreciate it!

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March 06, 2009

Pledge Week, Parts 4 and 5
by David Harrell
To make up for yesterday's skipped installment, here's a two-fer. Thanks again for listening -- by streaming these songs you're making a micro-donation. And -- if you're feeling generous -- please consider buying a song or album download (or a CD) using the links below.

"Splendor and Loss" is probably my favorite recording from our second disc. Unlike the rest of the album, which was tracked as a full band, this one started with just a single acoustic guitar and we overdubbed everything else.


Download from iTunes, Amazon MP3, Bandcamp, or eMusic. If you prefer an old-school CD, discs are available at CD Baby, Tonevendor, and Amazon.com.

"On Any Given Saturday" has the best back-story of any song on the new album. We had worked up a live cover version of Donna Summer's "Hot Stuff" and played it at several gigs. We liked the backing track, but really didn't want put a cover song on the record. So we recorded the backing track and (very slowly) came up with a new vocal melody and lyrics.


Download from iTunes, Amazon MP3, Bandcamp, or eMusic. CDs are available at CD Baby, Tonevendor, and Amazon.com.

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March 05, 2009

Ignoring Amazon MP3's Bargain Prices
by David Harrell

Amazon.com mp3 banner

It was Tuesday's "daily special," but the sale has evidently been extended, as the new U2 album is still priced at $3.99 on Amazon MP3. While the sale price is likely increasing purchases (the album remains at the top of Amazon's album download chart), "No Line On The Horizon" is also the top seller on CD at Amazon ($9.99), as well as the best-selling album in the iTunes store ($9.99).

What amazes me, however, is the apparent lack of comparison shopping by many purchasers of digital albums. As Coolfer noted yesterday in a link to this VentureBeat story, the Amazon MP3 store has been fairly aggressive with its pricing for several months now. And while the interoperability of the iTunes music manager, the iTunes store, and the iPod is often touted as the major strategic edge for Apple for selling digital downloads, it's simply not a real advantage. It's no less convenient to purchase and listen to downloads from Amazon MP (or eMusic for that matter) -- the Amazon download manager tool will automatically add your purchases to your iTunes library.

While it makes no sense to drive all over town to save a few bucks on a CD, we're talking 15 seconds to check the price at Amazon MP3. I'd never buy an iTunes album without first checking the prices at Amazon.

Maybe consumers are just extremely slow or loath to change their shopping habits or perhaps many iTunes shoppers are unaware of the Amazon MP3 store. It is true that the iTunes versions of albums are more likely to contain bonus tracks or digital booklets, though that's not always the case and I'm not sure how much these features are valued. So I can't help wondering when Amazon MP3 will pick up some substantial market share at the expense of the iTunes store -- it seems somewhat inevitable...

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March 04, 2009

Bandcamp 1.0 and Pledge Week, Part 3
by David Harrell

Bandcamp banner

Bandcamp rolled out a bunch of nifty new features and declared itself "1.0" The new stuff includes:

-- Improved site speed and the move from Bandcamp.mu to Bandcamp.com

-- The ability to generate "free download" codes that be given out with merchandise purchases, etc.

-- More song/album widgets that can be used by both artists and fans

I'll write more about Bandcamp in the near future, but for now I'll just say I'm very impressed with everything I've seen so far. The file format flexibility (128k mp3, 320k mp3, VBR mp3, AAC, Ogg Vorbis, FLAC, and Apple Lossless) is -- as far as I know -- unmatched by any other download store. And I really like the option to offer free 128k mp3 downloads while charging a set rate (or letting buyers choose their own price) for higher-quality files. It seems like a good compromise on the "free music" debate.

So for the third installment in the pledge week series, I'm using one of the new Bandcamp widgets to embed "Keep It To Yourself," the lead-off track from "The Space Between," the new Layaways album. The song received a great review when it was featured on the Fingertips music site:
Launching off a sonorous, rubbery guitar line that, melodically, echoes the hook from the Kinks' "David Watts," "Keep It To Yourself" has the big-drums/big-chords bash and concise melodicism of some Nuggets-era -- um -- nugget, with a welcome helping of shoegaze drone. The song itself is pithy and unadorned, but the presentation is cool, full-bodied, and impeccably controlled -- not a note or sound is out of place.

Taking nothing away from David Harrell's understated, slightly processed vocals, I think his guitars are the stars here, presenting alternately as zipped-up-tight rhythm, circular synth-like lead lines, and droney dissonance. When the three sounds combine in the second half of the song, we definitely arrive in one of those "the whole is greater than the sum of its parts" places. It can't be easy to make something this basically simple sound so fulfilling; it if were, everyone would do it.
<a href="http://thelayaways.bandcamp.com/track/keep-it-to-yourself">Keep It To Yourself by The Layaways</a>

Unlike the Lala.com widgets, however, streams from a Bandcamp widget currently don't generate any revenue for the artist or label. Which is understandable, given that Bandcamp's business model is still a work in progress and there is no revenue to share. (I wouldn't say this is a huge concern for me right now, given that you can pull your music from the site at any point. Still, I'd want to have more details about possible fees and charges before using Bandcamp pages as the actual music pages on my own site.)

Anyway, if you like the track or would like to support this site, please consider buying a download from iTunes, Amazon MP3, Bandcamp, or eMusic. Or, if you prefer an old-school CD, discs are available at CD Baby, Tonevendor, and Amazon.com.

Thanks for listening!

related: Checking Out Bandcamp, Pledge Week on Digital Audio Insider

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March 03, 2009

Pledge Week, Part 2
by David Harrell
Next up for pledge week is "The Answer," from the second Layaways album, "We've Been Lost." Indieworkshop.com described the song as "gorgeous, dreamy pop with hooks galore and some nice harmony vocals on the chorus that seem to announce that it's summer, you're in love, and everything is right with the universe."

As noted in the first pledge week post, just streaming the track generates a small micropayment. If you like the song or want to support this site, please consider buying a download from any of the fine digital retailers below.


Buy the download from iTunes, Amazon MP3, or eMusic. Or, if you prefer an old-school CD, discs are available at CD Baby, Tonevendor, and Amazon.com.

Thanks for listening!

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Tuesday Odds and Ends
by David Harrell
The new U2 album is today's daily special at Amazon MP3. While the $3.99 price has no doubt helped to push it to the top of the mp3 album download chart, the CD version is the best selling disc at Amazon.com and the album is also the top download at the iTunes store, where it's selling for $9.99. (A $17.99 deluxe version is in currently in the #5 slot.) The Amazon reviews are mixed, while the disc gets a Metacritic average of 71. Pitchfork 'forked it with a 4.2.

Lawrence Lessig answers questions from readers of the Freakonomics blog:
Q: File sharing and music piracy have sparked some interesting debates in the last decade as "leaked" material is shared all over the web. What, if any, solution do you deem plausible for the current state of the music industry?

A. It is my view that Congress should enact a compulsory or voluntary collective license to 1) legalize (at least noncommercial) file sharing and 2) compensate artists for any harm such sharing is estimated to cause. The second part of this would secure the objectives of copyright -- money to artists. The first part would end the "war" we’re now waging against our kids.
And CD Baby has a list of albums in its catalog by actors, including this one from Creed from the Office. I had no idea that he was the original guitarist for the Grass Roots:



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March 02, 2009

Pledge Week on Digital Audio Insider
by David Harrell
As the parent of a three-year-old, I've had the delicate balance of the daily schedule ruined by the local public television station's juggling of its early morning lineup during fundraising drives. So I'm not a huge fan of pledge weeks. :)

But if the kind readers of this site will indulge me, I'd like to highlight a Layaways track each day for the next week. You can stream each song using the embedded widget (a literal micro-donation, as each stream puts 0.5 cents in my pocket), and -- if you like the song or are feeling generous -- download the track from iTunes, Amazon.com, or eMusic.

First up is "All Around the World," from the latest Layaways album. It's something of a departure from our usual sound, with a definite 60s vibe with its quarter-note rhythm and liberal use of the tambourine. Lyrically, the song reflects our current "anyone can be a star" pop culture -- American Idol, etc. And the Leslie effects you'll hear on the chorus vocals (and the drums during the last verse) aren't from a plug-in, Dan Dietrich of Wall to Wall Recording in Chicago ran them through an actual rotating speaker for the mix.


Buy the download from iTunes, Amazon MP3, or eMusic. Or, if you prefer an old-school CD, discs are available at CD Baby, Tonevendor, and Amazon.com.

Thanks for listening!

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Monday Odds and Ends
by David Harrell
The CD Baby catalog is coming to Spotify:
Ingestion of the CD Baby catalog into the Spotify system has already begun and is expected to be completed by April, 2009.
Tony van Veen, president of Disc Makers (the new owner of CD Baby) is blogging. Here's his take on the future of physical distribution and retail sales for indie and self-released artists:
- Physical distribution to bricks and mortar goes away. No distributor with nationwide reach will want to take a chance on an unknown act. Artists will realize the futility of physical distribution through traditional channels, and stop aspiring/hoping/dreaming of a distro deal.

- CD sales direct to fans at gigs will continue to be a major revenue generator for independent artists for years to come. Catching a fan when they've just experienced a great show is still a strong sales driver, and will always be.

- The main nationwide CD distribution opportunity for independents will be online. A couple of megastores like Amazon will thrive, as will niche players like CD Baby (100% independent), and other stores in certain narrow verticals (specific genres or interests).
And Eminem's lawsuit against his label over royalties for iTunes sales has made it to court. Via Mark Mulligan.

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    Popular Posts

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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