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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September 23, 2008

While I Was Out
by David Harrell
A couple things that didn't get posted during my recent blogging hiatus:

Amazon.com MP3: We had previously sold some individual tracks, but our first "full album" sales recently showed up in our CD Baby account. The albums are priced at $8.99 and Amazon paid out $6.50. (We received 70 cents for individual tracks that sold for 99 cents.)

Lala.com: In August, our first two albums were delivered to Lala from CD Baby and one of them is now up and running on the site:



In addition to offering free streams and mp3 sales, Lala sells 10-cent "web songs," that allow you to stream the track an unlimited number of times. I'm curious to find out what the payout rate is for them, so I purchased the web songs for a couple of our tracks.

As I noted in an earlier post about the new Lala.com, whatever the payout rate, the dime songs appear to be a worse deal for labels than the payouts from the traditional (Napster, Rhapsody) subscription/streaming services. That is, even if Lala pays the entire dime to the label, once you get beyond 10 plays, it's a worse deal for the labels than the Napster/Rhapsody rates, which pay at least a penny a stream. Then again, it's not an either/or proposition -- the number of subscribers to the streaming services is still relatively small, so there's a good chance that sales of the dime songs are to music fans that don't subscribe to either Napster or Rhapsody.

My other thought here is that -- as much as possible -- it makes sense for musicians to try to steer listeners to free streams that offer some compensation (even if it's only a fraction of a cent per listen). For example, rather including your own Flash-based music player on a band site, why not embed an album or playlist using a Last.fm or Lala.com widget? Unless you're averse to having a branded player on your on site, it at least gives you the chance to capture some revenue for the free streams. And I can't help wonder how much some of the more popular MySpace acts would've earned if there was any sort of per-stream payout for the current MySpace music player. (I believe there'll be some sort of ad-revenue share for the new MySpace Music...)

related: The New Dime Store, Part 2

tags:

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September 18, 2008

Checking Out Bandcamp
by David Harrell

Bandcamp banner

David Rose of Know the Music Biz recently made the case for musicians selling downloads directly from their own websites, instead of sending listeners off to iTunes, Amazon.com, etc. While my guess is that most consumers prefer to buy from a download store -- if I want to buy something I've discovered, my first impulse is to check eMusic, then Amazon.com MP3 if eMusic doesn't have it -- there's certainly no downside to doing so. Without direct sales, maybe you're missing out on some impulse purchases.

The new Layaways album is tentatively scheduled for an October 28th release. And while we're planning to offer free digital tracks (in addition to selling CDs and digital downloads in the usual places), given that "it can't hurt," I've been thinking about ways to offer direct sales. Bandcamp, which got a very positive mention from Hypebot yesterday (also see this Waxy.org interview with founder Ethan Diamond), seems like it might be an easy way to facilitate online sales.

I spent some time with it yesterday -- here's my quick take:

There's a lot to like about Bandcamp, as well as a couple things that are somewhat disappointing, though the Bandcamp folks can't be faulted for one of them.

Pro:

Great design and interface -- it's definitely one of the better looking music download sites. And the musician has complete control over the details on the album and track pages -- credits, images, lyrics, etc.

Fast -- your tracks are available for sale almost immediately after uploading. If you wanted to, you could be selling live tracks just minutes after finishing a gig.

Very flexible download/file options. Users just upload a single WAV or AIFF file for each song, Bandcamp then handles all conversions to various file formats -- 128k mp3, 320k mp3, AAC, Ogg Vorbis, FLAC, etc., and takes care of all of the ID tagging. You can decide what to offer as a free download and set the selling price for paid downloads.

East viral sharing -- anyone can create code for adding a track/album widget to social networking sites or web pages:

<a href="http://thelayaways.bandcamp.mu/album/weve-been-lost">Silence by the layaways</a>

Responsive team -- the site was a little sluggish and I was having trouble uploading a music file. But I received an e-mail response to my help request within half an hour.

Con:

A small quibble, but as far as I can tell, there's no option for setting different prices for different file formats, other than giving away 128k mp3s and charging for other file formats. That is, you can't set one price for mp3 downloads and a higher price for lossless files.

It's not on your site! One thing that Bandcamp touts is search engine optimization -- that your Bandcamp pages will show up as the first result when a music fan does a band name/song title search. But it seems like you're essentially handing your Google ranking over to Bandcamp. My strong preference would be the ability to have the entire Bandcamp sales platform on my own site, as opposed to linking. Though that might not work with the...

...business model, which isn't finalized yet. For now, Bandcamp is free (hard to complain about that!), but there's no guarantee as to what future fees might be, though the FAQ says that any cut of digital sales would be limited to 15%. If all of the Bandcamp functionality worked within an embedded widget or was completely "behind the scenes," it would obviously limit the possible revenue models.

But what really dampened my initial enthusiasm for Bandcamp are the PayPal fees for each transaction. One of the first things I noticed when setting up a track is that the minimum price for an individual track is 50 cents, which pretty much rules out "eMusic prices" for individual tracks. I soon learned why -- the PayPal transaction fees are 30 cents per transaction plus 1.9% to 2.9% of the purchase price. At standard iTunes pricing (99-cent tracks, $9.99 albums), that works out to around 33 cents for a track and 60 cents per album.

Hence, there's not much of a financial advantage to selling a 99-cent download via Bandcamp versus a 99-cent sale via iTunes or Amazon.com. However, for album sales, a $9.99 sale would net a self-released artist a couple bucks more than an iTunes or Amazon.com MP3 transaction.

Despite the above misgivings, my initial impression is that Bandcamp mostly got everything right, and the PayPal fees aren't something they can control. I just wish there was a workaround of some sort to keep the transaction fees low enough to offer more flexibility for single-song prices.

tags:

link 1 comments e-mail listen to the Layaways on Spotify


September 15, 2008

Future of Music Coalition Appearance
by David Harrell

Future of Music banner

I'll be attending the Future of Music Coalition's Chicago seminar next Monday, September 22nd -- and appearing on the "Music 2.0: How musicians can use technologies to promote and distribute their work" panel. Complete details and the full schedule for the day are here.

My apologies for the month-long posting drought. We mastered the new album last week and while we're making a few small changes, it's essentially finished! Next up -- insert design, CD manufacturing, a website redesign, booking some gigs, etc...

tags:

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August 18, 2008

Busy, Busy, Busy
by David Harrell
Sorry for the recent lack of posts. We're in the final stretch for the new Layaways album, trying to finish up the last few overdubs and mixes before mastering the record. So things here will be quiet until September. Thanks!

link 1 comments e-mail listen to the Layaways on Spotify


August 08, 2008

About That Gift Horse
by David Harrell
I suppose it's impolite to complain about a freebie...but here's some advice for the band Phoenix and the jeweler Cartier: If you're asking people to both register and suffer through an extremely slow-to-load website to download a free mp3, give them something better than a 96k file!

tags:

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


July 30, 2008

Buying Free Music
by David Harrell

NIN

Nine Inch Nails' "The Slip" has been available as free download from the band's website since early May. But enough eMusic subscribers have downloaded a paid version (released last week) to push it to the #15 spot on the daily download chart.

The eMusic subscriber reviews for the album reveal two sentiments -- "don't waste your downloads on a free album" vs. the "I want to support the band so I'm going download it again via eMusic" school of thought:
"i'm not saying you shouldn't get this album, just know that it's available for FREE on NIN's website."

"I downloaded this from nin.com, but will get it here..."

"it's a good album, and throwing the meagre cost of these downloads their way is the least you can do to thank Reznor for joining the eMusic fold."

"People, as much as I support Emu, The Slip is available for FREE from nin.com. You don't need to spend 10 dls on this."
I'm no expert in the psychology of purchasing decisions, but I've always thought the eMusic subscription model was ideal for encouraging music fans to "purchase" something they already own. Because your monthly allotment of downloads is already paid for, you're not pulling money out of your pocket for each specific download decision. Hence, it seems a little easier to be generous and "buy" the eMusic version, either for sake of convenience or to support an artist. While I haven't downloaded "The Slip" from eMusic, I'll often download songs that I first obtained as free mp3s from band websites, Insound, betterPropaganda, etc., basically treating my eMusic subscription as a mini-patronage system of sorts for indie bands. If an act is self-released, eMusic downloads are an incredibly efficient way to transfer money to them -- they can actually receive more for each download than the per-song rate the subscriber is paying. (Because most subscribers don't use their full allotment of downloads each month, the per-song payout rate from eMusic, as determined by its revenue-sharing agreement, is inflated beyond the nominal per-song price implied by the monthly subscription prices.)

The album is also available as an mp3 download from Amazon.com (and there's a CD version with a bonus DVD), but it ranks considerably lower on the daily album download chart -- it's currently #80.

UPDATE -- Coolfer notes that the album was near the top of the Amazon chart when it was priced at $5. The album is also available in the iTunes store for $9.90, though it's currently not among the top-100 albums. The customer reviews there offer a similar mix of "don't waste your money" and "download it to support Reznor" comments.

Perhaps the difference in chart positions provides some evidence of the difference between using pre-paid eMusic downloads and making a specific purchase decision within the Amazon mp3 store, though given that the album is considerably less expensive for eMusic subscribers, it's not surprising that they're more likely to download it. There's also the issue of the respective catalogs of eMusic and Amazon.com. When "big name" artists or albums show up in eMusic, they frequently shoot to the top of the download charts.

tags:

link 4 comments e-mail listen to the Layaways on Spotify


July 28, 2008

Odds and Ends
by David Harrell
Former Tower Records COO Stan Goman, on his new job -- running a small copy and printing shop:
"I'll tell you, it beats buying records for $12.03 and trying to sell them for $9.99."
How to save the music industry? Just put more people in jail:
"I have dodged every conventional bullet that has hit most music retailers," Paris says. "I don't have to worry about downloading, legal or illegally. The beauty of it is that prisoners don't have Internet access and never will."
Via Freakonomics.

And this would be a great development: According to this message board post, CD Baby will soon allow coordinated release dates for physical CDs and the iTunes version of the album. (Currently, CD Baby sends the files, but it's basically a waiting game at that point for an album to show up in iTunes and other digital retailers. I believe it's the same for TuneCore distributed works, at least for smaller acts.)

tags:

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


July 24, 2008

Giving It Away: A Call for Ideas
by David Harrell
After many delays and a couple mini-catastrophes -- we literally lost the ProTools files for the mixes of three songs (don't ask...) and a camping accident temporarily sidelined our drummer -- the third Layaways album is nearing completion. We've set a mastering date for early September and the album will be out sometime in October.

As discussed in this post from last year, while it will be available on CD and from all of the major digital retailers, we also want to give it away in some form. The question is -- how should we do it? Or, more specifically, is there something an unknown, self-released indie rock act can do beyond posting some free mp3 files and hoping for the best, in terms of attention and web traffic?

Alternative pricing strategies get the best results when they're used by acts that are already relatively well known: Radiohead's "pay want you want" experiment received the attention it did not because the idea was new (it wasn't), but because one of the biggest, best-known acts in the world embraced it. Pricing the new Paul Westerberg "album" for 49 cents was a brilliant idea (it's now sitting at the top of the Amazon.com mp3 album chart) because it's a Paul Westerberg album for 49 cents. And Harvey Danger received a fair amount of attention for its album giveaway in 2005, but they're a former major-label band that had a decent-sized radio hit in 1998.

Given the ubiquity of free music these days (full albums and individual tracks, both authorized and unauthorized), it seems that music acts at all levels are vying less for the dollars of listeners than for their time and attention. Every "free" or "pay want you want" music release simply adds to that competition and -- with the novelty factor declining -- free alone is less likely to attract attention, especially for unknown acts. Still, while it's doubtful that our decision to give away an mp3 album will generate much buzz, I can't think of any major downsides to doing so.

Here are a few of the approaches we're considering:
All 12 tracks are available for free download, from day one and forever.

A 12-week campaign where only one track at a time is available for download, similar to the promotion for the upcoming release by the Pretenders.

The "get it while you can" approach -- the entire album is available in week one, then one fewer song is available in each subsequent week until we're down to just one free song.
The other question is whether or not to require registration or an e-mail address before letting folks download tracks. My inclination is skip registration -- if the idea is to get as many listeners as possible, why put up any barriers?

If you have any additional suggestions, comments are open and all ideas are welcome. Not just for my band, but any thoughts relating to the merits of giving it away for artists at every level of the music industry food chain.

Is offering free music -- alone or with options to purchase -- a viable promotional strategy, the new norm for the industry, or just an economically-unsustainable gimmick with diminishing future returns? Please chime in...

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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