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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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April 20, 2009

Additional Pricing Flexibility from Bandcamp
by David Harrell

Bandcamp banner

Bandcamp has rolled out some new pricing options for the artists selling downloads from the site. First, in response to the micropayment option for PayPal transactions, the minimum purchase price for individual tracks was decreased from 50 cents to 10 cents. (For all other currencies, it's 1/10th of the currency unit.)

The other change is a new option for free downloads of higher-quality files. Previously, bands could offer freebie 128k mp3s, but they had to charge for other file formats. As with the 128k free option, bands can require "purchasers" to supply an e-mail address:

Bandcamp name your price screenshot


So far, I've been very impressed with Bandcamp and its ongoing improvements. Perhaps multiple pricing options will prove confusing to purchasers (Steve Jobs used that argument when holding the line for 99-cent downloads), but here are a few more options that might be worth exploring or adding to the Bandcamp toolkit:
1. The ability to charge different prices for different file formats, such as 25 or 50 cents for mp3 tracks and 99 cents or more for lossless files.

2. "Track Packs" -- special pricing for any three tracks from an album (or any three songs in an artist's catalog).

3. Discounts for subsequent track purchases from the same album -- an idea I proposed in the third installment in my digital pricing conundrum series.
related: PayPal's Micropayment Option, Checking Out Bandcamp

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April 16, 2009

Thursday Odds and Ends
by David Harrell
A Wired interview with Lala.com found Bill Nguyen (via RAIN):
What we're optimistic about now is that our base of customers -- it's close to 100,000 who have credit cards on file with us -- they're spending. They buy about one out of every five songs they listen to, and 70 percent of their listening is discovery-driven (as opposed to people listening to songs they uploaded into their Lala lockers). It's pretty compelling.
Coming soon: Zune for mobile phones.

And, on a self-promotional note, the Layaways were featured on the RCRD LBL music site yesterday.

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April 15, 2009

PayPal's Micropayment Option:
What It Means For Digital Download Pricing

by David Harrell
Via the Bandcamp blog, I just rediscovered PayPal's micropayment option for sellers. (My apologies to Stu -- he mentioned it in a comment to my first Bandcamp post, but I failed to follow up on it back then.) It allows sellers to pay a higher pre-transaction percentage (5% as opposed to 2.9%) in exchange for a lower per-transaction fee (5 cents instead of 30 cents).

PayPal micropayment fees


When I first wrote about Bandcamp, one of my few qualifications was that the PayPal transaction costs severely limited the pricing options for single-song downloads. While a self-released artist selling a 99-cent download via Bandcamp (or the artist's own website) would net, after the PayPal fees, about as much as a 99-cent download sold at iTunes, the 30-cent portion of the fee meant that pricing a download below 99 cents meant earning less on direct sale. And you could forget about direct sales of tracks at eMusic prices, as a 25-cent download wouldn't even cover the PayPal fees.

But with the micropayment option, the self-released artists would net 89 cents on a 99-cent download. Or, you could undercut iTunes by 20 cents and still receive around 70 cents a track.

The micropayment fees also allows for some extremely aggressive pricing: If an artist wants to offer eMusic-equivalent prices for direct downloads, a 25-cent track will still net almost 19 cents. That's much less than what an iTunes sale puts in the pocket of a self-released artist, though my guess is that it's more than most major-label artists receive for songs sold on iTunes.

For a $9.99 album, the PayPal micropayment fees would reduce the net to $9.44, as opposed to $9.40 with the standard PayPal fees, making it something of a wash. Once the selling price reaches $11.90, the micropayment option becomes more expensive to the seller. So while it's perfect for digital tracks and albums, if you're selling $15 t-shirts you'd probably want to opt -- as suggested by the Bandcamp blog post -- to use a separate PayPal account for those sales.

related: Checking Out Bandcamp

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April 14, 2009

Tuesday Odds Ends: CD Baby and MySpace
by David Harrell
CD Baby will allow the artists it distributes to choose among the three iTunes prices starting this summer:
We expect variable pricing to be available sometime around mid-year. But our recommendation is to keep pricing at 99 cents, which I think is the right price for an independent download.
And I suppose I should log into MySpace more frequently -- I missed this message about increased song limits for the MySpace music player:
Date: Apr 3, 2009 3:11 AM
Subject: All Artists Can Now Upload 10 Songs!

As promised, the 6 song limit has been lifted! As of today, all artists can now upload 10 songs.

Stay tuned, more artist tools are coming.
Still no word on any ad revenue share to compensate for indie bands for song streams, however.

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April 13, 2009

Entitlement Fans
by David Harrell
As part of a long-gestating response to Kevin Kelly's now-famous 1,000 True Fans post (it should be up in the next week or two), I've been examining my own music collection and levels of fandom. Specifically, the total amount of money I've spent on various artists.

As someone who is trying to sell his own music, I'm somewhat embarrassed to admit that there are a handful of acts for which my basic attitude is "you've already got enough of my money."

I'm not saying I'd actively steal their music, but I wouldn't feel particularly guilty about if a CD-R or mp3s of their latest releases (or re-releases) somehow made it into my music collection.

How about you? Are there any acts that -- after spending hundreds of dollars on albums, CDs, remastered CDs, digital downloads, concert tickets, and other merchandise -- you've reached a personal "spending limit" for the band?

Or does it really come down to the quality of latest releases by these artists? That is, the streams I heard for the recent U2 album didn't entice me to buy it when Amazon MP3 was selling it for just $3.99. Had I loved the streams, I gladly would've picked up the digital album or the CD version.

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April 09, 2009

Thursday Odds and Ends
by David Harrell
As part of a much-welcome site redesign, CD Baby will soon feature "artist" pages in addition to the current album pages. Here's a preview of the new design, including the new logo.

I think Bob Lefsetz's right about the Decemberists -- from his latest rundown of SoundScan numbers:
They should pull an Amanda Palmer, get off their label. Since the first week's sales were all digital, imagine how much money they'd have made if they were distributed through Tunecore as opposed to Capitol!
If the band is going to consistently sell 60,000 albums, going it alone makes a lot of financial sense. But I imagine they signed to Capitol with the hopes of reaching a broader audience and selling a lot more...

Finally, slightly off-topic, but I'm now extremely disinclined to ever purchase anything sold by Monster Cable. From a recent WSJ story on the company's overzealous trademark challenges:
Over the years, it has gone after purveyors of monster-branded auto transmissions, slot machines, glue, carpet-cleaning machines and an energy drink, as well as a woman who sells "Junk Food Monster" kids' T-shirts that promote good eating habits. It sued Monster.com over the job-hunting Web site's name and Walt Disney Co. over products tied to the film "Monsters Inc." It opposed the Boston Red Sox trademark applications for seats and hot dogs named for the Green Monster, the legendary left-field wall in Fenway Park.
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April 08, 2009

Details on $1.29 Songs at Amazon MP3
by David Harrell

Amazon.com mp3 banner

Bruce Houghton at Hypebot provides some clarification on the $1.29 tracks at Amazon MP3. Despite higher wholesale prices, Amazon is holding the 99-cent line with premium tracks from Sony, Universal, and WMG. But they can't do the same with Sony and Sony-distributed releases:
Sony Forces $1.29 On All Stores
The glaring exception is hit product from Sony and its distributed labels which is priced at $1.29 an all retailers including Amazon and Walmart. Unlike all other labels and distributors, Sony offers its music to all download stores using the so-called agency model which enables the label group to control the final sale price.
Walmart, however, is knocking a nickel off that price and selling the tracks for $1.24.

related: $1.29 Tracks at Amazon MP3

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April 07, 2009

$1.29 Tracks at Amazon MP3
by David Harrell

Amazon.com mp3 banner

That didn't take long.

I was reviewing the Amazon MP3 chart to see how many of the $1.29 iTunes tracks are cheaper at Amazon and saw a few $1.29 tracks -- six out of the current top 50.

This Hypebot post predicted increased prices for Amazon and other digital retailers following the new iTunes pricing structure, but I didn't think it'd happen so fast!

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Quick Thoughts On New iTunes Pricing
by David Harrell
I spent a few minutes this morning browsing the new variable-pricing iTunes store. Some quick thoughts:

As noted in the New York Times coverage, about a third of the current top 100 tracks are priced at $1.29. My first thought was that lower prices for some catalog tracks might -- eventually -- result in a few 69-cent "golden oldie" tracks creeping into the top 100. That seems unlikely to happen, however. First of all, there's a numbers issue. There are far more older tracks than current releases, so the odds of enough music fans liking one particular older track at the same time to push it into the top 100 are quite low.

The other reason is that -- based on my quick browsing -- the labels are using the premium $1.29 price for some acts' most-popular back-catalog tracks, not just new releases. For example, in addition to tracks from their latest album, at least five U2 songs, including two from 1987's Joshua Tree, are selling for $1.29. Two of Nirvana's top sellers, "Come As You Are" and "Smells Like Teen Spirit" sport the higher price. Just one Who track is priced at $1.29, but it's "Baba O'Riley," the lead-off cut to the Who's Next album. Bon Jovi fans will pay the premium price for five of the band's biggest hits. Indeed, it seems easier to find $1.29 catalog tracks than 69-cent ones, although the initial coverage of the variable pricing indicated that there would be more 69-cent tracks than $1.29 ones.

One interesting quirk is that the premium price is applied to ALL available versions of the track. It's no surprise that Polydor raised the price of "Chasing Cars," the song that put Snow Patrol over the top after it appeared in "Grey's Anatomy." But you'll also pay $1.29 for each of the two live versions available in the iTunes store.

More to come...

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April 02, 2009

Thursday Odds and Ends
by David Harrell
The excellent Fingertips music site has an interview with yours truly.

Gang of Four's Dave Allen has a nice post at Pampelmoose on something I was asked about in the Fingertips interview -- the future of the album format:
We live in an era of MP3 players, streaming internet radio, web apps -- not to mention the iTunes music application and its ability to shuffle your entire digital music collection -- now the cloud and almost-mobile ubiquity, the list goes on; in what part of digital music culture does an album-length piece of work now reside?

I'll answer that question - I believe it has no place in a digital future.
Finally, a blog housekeeping note: I added a Twitter section to this page -- you can see my five most-recent Twitter posts in the right-hand column. The full feed is here.

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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