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digital audio insider |
home about/contact 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. As an Amazon Associate I earn from qualifying purchases. Support 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. links music/media/tech: Analog Industries Ars Technica AppleInsider Brad Sucks Blog Broken Record Digital Music News Duke Listens Future of Music Coalition Blog Hypebot LA Times Technology Blog The ListeNerd Medialoper Mediashift MP3 Insider Music Ally Music Machinery Music Think Tank MusicTank The Music Void New Music Strategies Online Fandom Pakman's Blog RAIN Rough Type RoughlyDrafted Swindleeeee TuneTuzer Virtual Economics economics/markets: The Big Picture Core Economics Freakonomics The Long Tail Marginal Revolution The Undercover Economist mp3/music: 17 Dots 3hive Fingertips Shake Your Fist Sounds Like the 80s Unleash the Love archives January 2006 February 2006 March 2006 April 2006 May 2006 June 2006 July 2006 August 2006 September 2006 October 2006 November 2006 December 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 May 2008 June 2008 July 2008 August 2008 September 2008 October 2008 November 2008 December 2008 January 2009 February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 2010 March 2010 April 2010 May 2010 June 2010 July 2010 September 2010 October 2010 November 2010 December 2010 January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 April 2012 May 2012 June 2012 August 2012 October 2012 November 2012 December 2012 January 2013 February 2013 March 2013 June 2013 August 2013 February 2014 March 2014 September 2014 December 2014 March 2015 October 2015 November 2015 December 2015 October 2016 May 2017 May 2025 |
August 18, 2006 Friday Fun: Variable Pricing in 1983by David Harrell Friday Fun: Variable Pricing in 1983 In 1983, a very young-looking REM made its national TV debut, playing "Radio Free Europe" and the not-yet-titled "So. Central Rain" on the David Letterman show. In this clip, Letterman talks to the band before they play their second song. Listen for the discussion with bassist Mike Mills @ 1:01 about the effect of the lower-than-average list price for the Murmur album ($6.98 vs. the then-standard $8.98) on record sales: (Here's a link to Radio Free Europe.) I'm off to the Bandwidth Music + Technology Conference. Check back next week for a series of posts about the different panels. tags: REM variable pricing Bandwidth Conference link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet August 15, 2006 Tuesday Odds and Endsby David Harrell Tuesday Odds and Ends Shane Richmond (news editor for the telegraph.co.uk) weighs in on the eMusic price increase for Europe, noting that eMusic is still a relative bargain: Instead of £10.57 per month I'll now pay £12.78, which is a discount rate eMusic are giving to those who were subscribers before the switch. They say it's the same rate as before but with 17.5 per cent VAT added. I'm told I can keep this rate as long as I keep my subscription "active and in good standing." What does 'good standing' mean?Somewhat related: I received a note last week from one of the founders of Klicktrack, a new Swedish download store that is selling mp3s (no DRM) for 95 Eurocents each. Not sure if VAT is added to that price. So far, it looks like the catalog is mostly European labels, including Labador, home of The Radio Dept. and Club 8. WGBH's Forum Network has an mp3 of a great presentation by Duke law professor James Boyle that addresses the negative impact of DRM and overuse of copyright law on developing media markets. You can download it here. Boyle's also the author of Bound By Law?, a supercool guide to public domain issues in comic book form. tags: eMusic Klicktrack DRM link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet August 14, 2006 The European Premium for eMusicby David Harrell A couple weeks ago, I posted about this thread at Marginal Revolution, which discussed why some things cost so much more in the UK relative to the US, including iTunes downloads. One obvious reason is higher taxes (the ubiquitous Value Added Tax), though taxes alone don't account for the premium that iTunes customers are paying in the UK. It seems like iTunes pricing in the UK also takes the retail prices of CDs into consideration. And for retail CDs and other consumer items, there are all sorts of reasons given for higher UK prices -- higher minimum wages, higher rent rates for retail stores, and so on. Plus, music licensing is generally more expensive in Europe (see below). Now that eMusic has launched its European service, subscribers over there are going to be paying a lot more for their subscriptions. It appears that current customers will get to keep their old subscription rates, though they'll get socked with the VAT now that eMusic has an official European presence. But new subscribers will have to pay a fairly large premium BEFORE the VAT is accounted for. This post at Swindleeeee gives a complete breakdown of the new pricing schedule for eMusic customers in the UK and the rest of Europe: Prices for all Basic plans were increased 46% in the UK and 42% in the rest of Europe.Again, the percentage increases listed above are all BEFORE the VAT is added in. For all I know, eMusic might be paying out all sorts of additional fees and licensing payments in order to offer the service in Europe, leaving it with it comparable margins for US and non-US subscriptions. That's pretty much what eMusic said in an e-mail response to one subscriber: The costs of selling music in Europe are higher than in the US, and by launching European sites, we must adhere to national and international laws requiring VAT collection and compensate the various labels, publishers, and artists under the terms they require. As a result of this reality, we were required to make various price adjustments.Still, it seems like music downloads would be a product where a universal price might work. No packaging costs, no shipping costs, no salaries for retail, etc. Are the higher licensing/publishing fees for Europe really enough to push prices so high, even before the VAT? Obviously, some European eMusic subscribers aren't thrilled with these changes. Here are some comments from recent threads on the eMusic subscriber forums: I don't see a possible reason behind this. Emusic is an online site, not a brick and mortar shop, what possible need could they have for a European base? The problems before were to do with labels, not the location of the company, surely deals with UK labels could still be sorted out from the US?Anyway, it'll be interesting to see what portion of the European premium is paid back to artists and labels. I'll follow up with an update as soon as we receive some sales from the eMusic Europe store. tags: eMusic iTunes link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet August 11, 2006 Friday Funby David Harrell Friday Fun A little off-topic, but I couldn't resist when I found the video for my favorite Blondie song on YouTube. Earlier in the year, just before Blondie's induction into the Rock and Roll Hall of Fame, some folks on the Bob Lefsetz mailing list were dissing the band and its musicianship. Witness Clem Burke, the best rock/pop drummer of the past 30 years: I would've loved to have been in the studio/rehearsal space to hear the band discuss the arrangement on this one. Have to imagine it went something like this: "Clem, we want you to play a drum solo on this one."Unfortunately, the YouTube clip cuts off the first couple of beats from Clem's kick-drum intro but it's still a hoot. tags: Blondie Clem Burke link 1 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet August 10, 2006 Interview with Jim Kelly of Parasolby David Harrell Interview with Jim Kelly of Parasol Parasol is an online/mailorder retailer, a distributor, and a group of indie labels. Jim Kelly, who heads up Parasol's publicity department and the label group, was kind enough to share some thoughts via e-mail about digital sales and download stores. There's an impressive list of free mp3s on the Parasol downloads page. Do you have any feel for how offering a free song affects subsequent sales of the album? From our site I don't suppose we have a good way to track those numbers, plus the number of our own-site visitor downloads isn't that large. When we've given away tracks via Pitchfork, for example, we've seen a huge increase in downloads and usually corresponding jumps in direct mailorder sales, but it certainly varies. Not a science by any means. Getting those free mp3s in front of the right people is the most important thing. Digital store trends: my pet theory is that while the sale of a song at iTunes nets a label more than a download from eMusic (70 cents vs. 20 cents or so), the eMusic audience might turn out to be the best bet for indie labels and artists. Any thoughts here or details you can share about which digital stores are generating the most sales for Parasol labels? ITunes and eMusic are #1 and #2 for Parasol and account for at least 95% (and likely more) of our digital revenues. I feel like eMusic parlays their commitment and enthusiasm for the music in a way that makes up for the lesser per-download revenues. I'm also positive that folks use their iTunes and eMusic subs to decide which physical albums to purchase. We get plenty of mailorder action from folks who downloaded such and such for such and such service...nice to know that digital drives physical sales too, a circuit connected! We have enjoyed working with eMusic through the years while, for myself, iTunes remains a less personable entity. continue reading "Interview with Jim Kelly of Parasol" Let's talk about digital download pricing. I know it's not something you have much control over, but what do you think about the current price of downloads relative to buying a CD: Are download prices too high or just right relative to CD prices? Like all other labels, taking in $6+ on a full-album digital download from iTunes we've got no complaints! GRAVY! Has the proliferation of mp3 blogs and podcasts caused you to make any major changes in your promo strategies? Has the influence of traditional press outlets declined significantly? We usually do a pretty nice mailing of new releases we're publicizing to bloggers of note. It happens naturally and organically whether we plan it or not. So we try and make it part of our campaign and we schedule mailings to have the hype landing nearer to official release dates. I also do a bit of policing to convince bloggers to focus on a single track or two. More than occasionally I'll find bloggers giving away entire EP, even albums, but I've found that a polite email sets them straight. As far as reviews reaching the widest audience I'd rather have a Pitchfork review online than anything in print in -- let's say -- Rolling Stone or Entertainment Weekly...I'm just not sure print magazines are reaching the audience we are targeting anymore. On that front Magnet and upstarts like Arthur are the exceptions to the rule. Finally, where do you see things in five or 10 years? I don't think the CD is going away anytime soon, but do you see a crossover point in the near future where digital sales approach or surpass the sales of physical discs? Our release of Jose Gonzalez's "Veneer" album last year (prior to Mute whisking him away) saw digital and physical sales almost neck and neck for the first 4 months...which certainly was an anomaly. Perhaps more about a lack of physical sales at the time than what seemed like a surplus of digital sales. I see a point where labels will press CDs for promotional use and for compact disc fans (much like vinyl is produced for vinyl fetishists now) as digital takes over a much larger share... The industry is about to begin entertaining the whims of an entire generation of consumers who have spent their formative years downloading (legally or otherwise) who won't have the same attachment to the physical CD. Like my kids for example... They've grown up with iPods and iTunes and burning CD-Rs -- that's how they listen to music. Thanks Jim! tags: iTunes eMusic mp3 digital downloads link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet August 07, 2006 CD Baby Pulls the Plug on Towerby David Harrell CD Baby Pulls the Plug on Tower Just received an e-mail from CD Baby that ended with: P.S. TOWER RECORDS UPDATE: Due to their financial situation, we have discontinued our relationship with Tower Records. Read the news here: http://news.google.com/news?q=tower+records If you have links to tower.com website, you should remove them, because they are not selling any CD Baby CDs anymore. We will take the responsibility of making sure you get paid for sales that already happened, but there will be no more sales through tower.com in the future.tags: Tower Records CD Baby link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet August 03, 2006 Guest Post and iTunes Pre-Ordersby David Harrell Guest Post and iTunes Pre-Orders A piece I wrote for the Moistworks mp3 blog is up today. It's about the new la la CD trading site and what I think is a potential flaw in the business model -- the fact that la la treats all used CDs as having equal value for trading purposes: So what's the rub? In la la land, every CD is treated the same. All of those unwanted copies of the first Hootie and the Blowfish record are, in the eyes of la la, absolutely equal to London Calling, Innervisions, or Revolver. I suppose the theory is that one person's junk is someone else's treasure and, with enough members trading, variances in musical taste will be enough to keep things moving along. But that might be wishful thinking -- when I entered 200 discs into my la la account, I wasn't that surprised at which 72 were flagged as requested. Someone out there wants your Nick Drake discs, no one's asking for that crappy third Oasis album.Read the full post here. After seeing that Christina Aguilera's Back to Basics album (which won't be released until August 15th) is the number three album at iTunes today, I was going to ask why in the world would anyone ever pre-order a digital download. It's not like iTunes is going to run out of AAC files on the release date. But it does include a "pre-order only" bonus track that's not available on the physical CD so I guess that's driving the pre-release iTunes sales. (The album is #9 today as a pre-order at Amazon.com.) tags: la la iTunes link 2 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet August 01, 2006 Varying iTunes Prices for Different Marketsby David Harrell Over at Marginal Revolution, there's an interesting post about why certain things cost more in the UK than the US. The first example in the e-mail that inspired the post is the 79 pence price of an iTunes download in the UK, which at recent exchange rates, is about $1.47. Several of the comments to the post touch on the higher iTunes pricing for the UK, but no one seems to have the definitive answer as to why it's more expensive to download a single track in the UK. My assumption is that the pricing was set relative to CD prices in the UK, which -- based on every ad I've ever seen in Mojo or Q -- are relatively expensive compared to the US. (Just found this 2004 article where Apple, in response to complaints about UK pricing, pretty much said so.) In other markets, Apple seems to be using the 99 cent/percentage as the price point -- 99 cents in Canada, 99 euro cents for Europe -- but .79 pounds doesn't quite have the same ring... So far, we've received payments for single-song sales from five different iTunes stores (nothing yet from iTunes Japan). For the most recent downloads, our cut from Apple (after CD Baby takes its 9% fee) works out to the following: Our iTunes Cut for a Single Song Download
iTunes UK $0.770 link 2 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet More Digital Audio Insider: Newer Posts Older Posts |
Subscribe: Add this blog to Del.icio.us, Digg, or Furl. Follow David Harrell on Google+. The Digital Audio Insider Twitter feed: Digital music jobs: Looking to hire? Looking for a job? Check out the digital audio insider job board. Popular Posts A Long Tail Experiment By the Numbers: Using Last.fm Statistics to Quantify Audience Devotion Lala.com Owes Me Sixty Cents An Interview with Jonathan Segel of Camper Van Beethoven Price Elasticity of Demand for McCartney Sony and eMusic: What I Missed The Digital Pricing Conundrum series: Part One Part Two Part Three Part Four THE LAYAWAYS Out Now -- "Maybe Next Year" -- The New Holiday Album: "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. "...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. "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. "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: the layaways website |