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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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June 25, 2008
Wednesday Odds and Endsby David Harrell
Jason Kottke wishes he could pre-order Amazon MP3 albums. Not sure why you can't -- it's an option for some albums in the iTunes store. Maybe it has to do with the availability of bonus content -- you usually get something extra (bonus tracks or videos) if you pre-order an iTunes release. Amazon does allow the pre-ordering of CDs before the release date.
An updated speakers list for the Bandwidth Conference includes Alexandra Patsavas from Chop Shop Music Supervision (Grey's Anatomy, The O.C., Gossip Girl, etc.)
And on a related note, in his list of measuring sticks for music success, Bob Lefsetz doesn't mention the lucrative option of licensing tracks for T.V. or films. But he's definitely not fond of up-and-coming acts selling their songs for commercials:
As for developing acts... You don't have an identity yet. You'll be forever linked with the brand. Feist...isn't she the iPod girl? It can be a shortcut to success, but can also damage your long term career. You get notoriety and... Well, sometimes you don't even get that notoriety. The blip tends to be momentary... Hell, how many commercials can you remember from three months ago?I won't say that there aren't downsides, but my guess is that Feist doesn't regret that ad.
tags: digital music Amazon.com MP3 iTunes Store music licensing
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June 24, 2008
How We Listenby David Harrell
Nick Carr's recent Atlantic article on how technology has changed the way readers read (and writers write) got me thinking again about how digital music and portable devices have altered music listening habits. Then I stumbled across this great post on the eMusic blog about the ups and downs of the National. While the post is more about the idea of artist longevity and the time it takes to develop an audience, the reader comments include some excellent thoughts on how digital music (and the ever-expanding amount of available content) is affecting their listening habits:
I've been wondering if the digital download model isn't killing music in a much different way than what RIAA is worried about. There's still plenty of money to be made, especially in selling concert tickets and merchandise, but people just have so many options of music to listen to. This is one of the things I love about emusic but at the same time it can be occasionally frustrating; there's just so much music! (Particularly relevant to me tonight because I've been backing up some things to clear a little space on my hard drive.) And I don’t even do any of the file sharing stuff; I get almost all my music from emusic. But If I think back to the time when I was getting really hooked on certain bands, I was purchasing probably 1-2 albums a month; where now I get 10-15 albums, plus all the free stuff...and don't get me wrong it's great, but sometimes I feel I lack the time to really get to know a particular piece.It's partially my age -- I have less time these days to stay on top of everything, but even if I could devote all of my waking hours to music consumption, my guess is that I'd still feel like I was drowning.
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I definitely spend less time with each album than I used to. It's not even that I get bored with albums, it's that I have 75 downloads per month, plus a few subscriptions to Song of the Day podcasts, plus music my friends give me...the end result being I can love a band one month and get so distracted the next that I forget about it.
It's a trade-off of the Internet age -- more bands to listen to, and less time to spend with each one.
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It's funny -- I end up getting affected by the "too much music" phenomenon in a different way: because I'm so old-school in my music listening habits, I'll get stuck on one record for a few weeks at a time. As a consequence, I start getting anxiety about all the really great stuff that's passing me by just because I can't seem to stop listening to, say, J-Live or Shearwater. There are so many records that I keep "meaning" to get to -- so many records that I know I'd probably love -- and I'm afraid I'm just going to end up missing them.
Is there an official name for this sort of feeling? If not, I'm proposing "content fatigue." Or maybe Richard Saul Wurman already covered it with "Information Anxiety." A suggestion to Mr. Wurman: if you ever update the book, add a chapter about digital music.
tags: digital music content fatigue information anxiety
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June 17, 2008
Tuesday Odds and Endsby David Harrell
If you were wondering how Lala.com was going to handle 10-cent credit card transactions -- it won't. I just did the 79-cent upgrade from a "web song" to an mp3 file (for the lead-off track on this album) and saw the following message:
About your Lala walletAnd Amazon.com makes its daily and weekly mp3 album specials official -- here's the press release:
It wouldn't make sense to charge your credit card for every 10¢ purchase, so we ask that you add funds to your wallet in dollar amounts of your choice.
This enables you to then continue to easily add web songs with a single click. The funds you add to your wallet can also be applied towards the purchase of web albums and MP3s.
We will never add funds to your wallet without asking you first.
In celebration of Coldplay's new album, "Viva la Vida or Death and All His Friends," available on Amazon MP3 for just $8.99, this week's "Daily Deals" will be their preceding albums. "X&Y" will be available today for $1.99, "A Rush of Blood to the Head" will be available on Wednesday for $1.99, "Parachutes" will be available on Thursday for $1.99 and "Brothers and Sisters" will be offered on Friday for 99 cents. Past Daily Deals have included Madonna's "Hard Candy" at $3.99, Led Zeppelin's "Mothership" at $4.99 and Weezer's "Pinkerton" at $1.99.I'll write more in a later post, but I'm convinced that Amazon's long-term mp3 pricing goal -- for the bulk of its catalog -- is $5 digital albums.
tags: digital music Lala.com Amazon.com MP3 AMZN
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June 11, 2008
The Bargain Bumpby David Harrell
When Amazon.com MP3 began running its daily "blue light special," I assumed it would feature older, back-catalog titles. But some of the bargain albums are recent, big-name releases -- today it's Madonna's Hard Candy album for $3.99.
I'd love to find out exactly what kind of bounce Amazon.com is getting with these daily specials, though it seems pretty clear that the reduced price is moving some additional units: As of this afternoon, the album is #7 on Amazon's top mp3 albums chart, but it's only in the #50 spot over at the iTunes store...
UPDATE: As of Thursday morning, it's #1, and still priced at $3.99.
related: Amazon's Blue Light MP3 Special
tags: digital music Amazon.com MP3 digital music pricing
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June 09, 2008
The Nuge Priceby David Harrell
Given his arsenal and hunting prowess, I'm reluctant to speak ill of Ted Nugent. But I'm puzzled by the pricing for his god-awful "I Am the NRA" song -- $1.99 for a 128k mp3.
Perhaps some of that money is going to the organization he's singing about, but there's no mention of that on Ted's site. Or maybe Ted's just paying a fortune in credit card transaction fees, necessitating the 2X iTunes pricing for the direct-sold mp3. (The song isn't available in the iTunes store or Amazon MP3.) Yet at that price, you'd think Ted could break out a higher-quality sound file.
Pricing aside, I'm glad to see Ted's calling attention to one the country's most underappreciated groups -- welders:
At over four million members, the NRA's ranks are composed of teachers, cops, farmers, lawyers, welders, hero military veterans and at least one gonzo guitar player who is not afraid to speak his mind and stand up for what he believes in. NRA members believe it is our responsibility as Americans to participate in this experiment in self-government.Via Listening Post.
- Ted Nugent
tags: digital music Ted Nugent mp3 pricing
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June 06, 2008
Authors On Tour?by David Harrell
Economist Paul Krugman on the Kindle and e-books:
It's a good enough package that my guess is that digital readers will soon become common, perhaps even the usual way we read books.Krugman's probably right that widespread usage of digital readers will lead to decreased prices, and if P2P distribution of digital books takes off, only a minority of book downloads will be paid for. But I think he's a bit too optimistic about the "Grateful Dead" business model for books.
How will this affect the publishing business? Right now, publishers make as much from a Kindle download as they do from the sale of a physical book. But the experience of the music industry suggests that this won't last: once digital downloads of books become standard, it will be hard for publishers to keep charging traditional prices.
Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors' other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it's good enough for me.
If there's a digital revolution for books and an accompanying switch to unpaid content, it seems likely that the traditional publishing industry would be even more screwed than the music industry. With music, there's already an established tradition and audience for live music performance, which obviously pre-dated recorded music -- and the associated merchandising of T-shirts, posters, etc. Plus, the licensing of music for film, television, advertising, and video games is becoming increasingly lucrative for labels and musicians.
Yet I just don't see the same opportunities for publishers and authors to find alternate income streams. Very few -- in any -- authors could sell out an auditorium for a live reading, let alone attract a paying club-sized audience. And it's hard to think of any licensing opportunities for book content that would be as lucrative as music licensing.
tags: Kindle e-books digital media
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May 29, 2008
The New Dime Store, Part 2by David Harrell
A few more thoughts on the new "rental" option from Lala.com:
The "pay once and stream forever" model does alleviate one supposed consumer concern that's mentioned in most analyses of why "rental music" (the subscription model) hasn't taken off: The fear that -- if you ever cancel your subscription -- you lose all of your music and have nothing to show for all the money you paid.
I've never really thought this to be a valid issue -- it's seems akin to complaining that you can't watch HBO and ESPN if you cancel your cable subscription. Besides, you can always re-subscribe and gain full access to the catalogs of the subscription services. But, if that concern really held some consumers back from streaming subscriptions, the new Lala.com plan should be appealing. Though, as Michael Robertson points out in his analysis, purchasers of the dime streams are reliant on the continued existence of both Lala.com and this particular business model. Coolfer's take, which I agree with, is that it's unlikely for anyone to be too worried about losing something they paid a dime for.
Also, I'm very curious about how record labels will be compensated for these "purchases." I haven't read anything yet about how that dime is split with the labels, but assuming that the percentage breakdown is similar to iTunes, labels would receive approximately seven cents for every dime purchase.
Based on the payouts I've seen for my own band via CD Baby's digital distribution, Rhapsody and Napster pay at least one cent every time a subscriber streams a song. (There appears to be different Napster payout rates for the ad-supported free streams and streams by paying subscribers). So whenever a Napster or Rhapsody subscriber streams a specific song seven times or more, the label receives more than it will likely receive from the one-time payment from Lala.com.
Yet that comparison assumes it's strictly an "either or" proposition, and that the two models are competing for the same exact same consumers, with Lala.com dime purchases coming at the expense of repeated downloads within the previous subscription services. Given the relatively limited market share of the standard subscription models, it still makes sense to reach as many music consumers as possible, even under compensation plans that might pay less. (Warner Music Group is a major investor in Lala.com, so it's clearly on board with the revenue split, whatever it is...)
And -- of course -- labels have long accepted different levels of compensation to reach different digital music consumers -- 70 cents for 99-cent downloads from iTunes and Amazon.com MP3, 20 to 33 cents for downloads from eMusic subscribers, and so on.
BTW -- I spend a bit of time with the site today. Availability is somewhat hit or miss, but I'm impressed. It's easy enough to add songs and listen to them. (Still working on my 50 free songs, so I have yet to fork over a dime...). There's also the option to "upgrade" many of the streamable songs to mp3 for an additional 79 cents, which the makes the purchase of dime stream an attractive alternative to purchasing a download from iTunes or Amazon.com MP3. If the streams are enough, you've saved (on a percentage basis) a lot of money, and you don't pay a penalty for opting to purchase the mp3 at a later date.
related: The Latest from Lala: The Return of the Dime Store
tags: digital music Lala.com music subscriptions iTunes eMusic Napster Rhapsody
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May 23, 2008
The Latest from Lala: The Return of the Dime Storeby David Harrell
I received an e-mail today from Lala.com, touting the new features it will roll out next week as part of a site redesign. You can preview it here.
The big one is the new "a la carte" streaming option, where you pay 10 cents for the right to stream a single track as many times as you want:
As far as I know, this sort of thing hasn't been done before, and it creates some interesting math in comparison to the other subscription services. Currently, you'd pay $12.95 for a Napster streaming subscription and $12.99 a month at Rhapsody, giving you the right to stream the entire catalogs of each service. (It's a couple bucks more if you want to transfer tracks to a portable device.)
The question is -- how do consumers use subscription services? Are they sampling thousands of different tracks or simply using the service to repeatedly stream a smaller number of their favorites?
If it's the latter, the new Lala model is preferable. For the cost of a traditional "all you can eat" subscription plan, you could "buy" 130 tracks a month or more than 1,500 a year. If you tend to listen to a relatively small number of songs, paying a dime a piece for them makes a lot of sense. And you also have the option of stopping -- you can build up a library and add to it only when something new appeals to you.
Yet everything I've read suggests that the current audiences for subscription services fall into the former category -- music fanatics who might well listen to thousands of tracks in a given year. Which makes the "all you can eat" plans a better option.
But maybe it's not a matter of competing for those listeners. The new Lala model might appeal to music fans who have little interest in the standard subscription options, but who might find the dime-a-song approach for streaming very appealing. Even if 13 bucks a month isn't that much money, signing up for any ongoing monthly charge is always somewhat daunting. If part of the success of the iTunes store is the impulse purchase-friendly price of 99 cents, I can't help thinking that a digital dime store will find an audience as well...
tags: digital music Lala.com music subscriptions
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Popular Posts
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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