Will Lower Prices Help Sell More Albums?
from the one-would-hope-so dept
Before the recording industry effectively shut them down, the Russian website Allofmp3.com was doing a brisk business in showing that people were often more than happy to pay for album downloads if they were a hell of a lot cheaper than what iTunes and others were charging. Albums often were closer to the $2 or $3 range, which seemed a lot more compelling to many users. Of course, there were questions as to the legality of the service. However, it seems that some are finally realizing that it might help to make digital albums much, much, much cheaper. We've certainly seen this on limited attempts from individual bands, but apparently a large distributor of metal music has decided to lower the price on almost all of its digital download albums to $5.25. Who knows if that's the right price (I'd guess it's still too high), but it's good to see more experimentation on pricing. Hopefully, we'll begin to get more concrete data on how such pricing experiments work. We've already seen in the video game industry that price discounts can more than pay for themselves in increased sales. It's hard to believe the same wouldn't apply to music as well.
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Filed Under: album prices
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Yes!!
It's also why I purchased almost the entire Beatles catalog for about $0.25 per song. (I got in on the Bluebeat thing before it was shut down.)
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Still High.
10% of 6 billion people is not unrealistic when the price is in that price range ($0.05) and for only one sale or use it would generate 30 billion dollars and that is more than the entire figure for the industry in a year, but probably could be a lot more higher as that price range incentives irresponsible expending and it is hard for individuals to track what they expend unless you want to keep track of every purchase you do what only a few bother to do.
$5 dollars is still high for general consumption and will not block the "paying again" factor but for a "premium" type of thing it could be a low price.
The right price for the internet is zero point something LoL
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The new Spoon album, "Transference" is the same story. $4 mp3 downloaded album.
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Re:
Still, Amazon is almost always cheaper than iTunes; glad to see it increased it's market share last year. And it's nice to see someplace actually charging less for digital items than the physical ones. But I agree - it's still too much. I would be willing to buy lots of albums at the $2-$4 price point, but I can't see spending $8-$10 on something that I could probably download for free if I looked hard enough (even if it is illegal).
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Other factors.
But I guess dropping prices always help a little, although the PR they have now is bad and if they don't deal with that perception even free can't increase sales from people who won't buy because they are angry.
It is not just about money it may seem logical looking at numbers and missing the context for those numbers.
Even low prices can't help if people are pissed at you.
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RTB!
It gave people a RTB and delivered what customers wanted, at a price they were willing to pay. I browsed the site quite a bit but never purchased because it was a Russian based site and just didn't feel comfortable -- but had it been a US site I would have simply for the convenience factor.
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Re: RTB!
And yeah, I might get sued too.
If I can avoid all that hassle, I'd gladly pay something for it, but it's contingent on that convenience. Time is scarce. The more hoops I have to hop through, the less I'm willing to pay.
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Re: RTB!
Price was based on the data usage. MP3s in low bit rates cost the very least. The 'lossless' formats were the most expensive, and well worth it in my opinion.
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Yes
Buy used. With a guarantee. Cheaper.
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Re: Yes
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Amie Street comes to mind ....
What the record labels need to do is what Allofmp3.com did and combine that with an AmieStreet type system. Charge at cost for the bandwidth. Let the market determine the price. Set minimum and maximum cost per song and album. The more downloads the higher the price goes, if the downloads slow reduce the price. Do a 70-30 (artist-label) split on the profits with the artists so they agree to the contractual changes that would be needed to allow this. And dont use creative accounting to screw with the artists.
Simple solution to saving the record labels ...
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Re: Amie Street comes to mind ....
Oh, Hephaestus. what a joker.
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mp3sparks.com
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Re: mp3sparks.com
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The going rate is usually either $5, $10, or $15. The price changes depending on the band, the album, the venue, etc.
Despite what I would expect, $10 seems to be the sweet spot. I imagine people refuse to spend $15 because they can buy a CD from a 'real band' for that much.
But why turn down the cheaper option? people are actually less willing to buy a $5 album than a $10 album.
Does pricing something so low imply that it does not have value?
The same might hold true for digital files. Low pricing might imply that it has little value.
Paying anything for a 128kbps mp3 file seems like a rip-off to me, but I would (and have) gladly paid $5 for albums offered in the .flac format, even when a legit free option existed.
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see what the pirates did
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If downloads can be consistently lowered to the $5-6 range, I think it would sell more here also. But it needs to be done on a large scale.
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Yes.
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I would buy for $0.25 per song...
As it is, I don't buy or download music period. Too many other things to spend my money on. But for a good price, I definitely would buy.
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VPN
After all, if you're willing to pay $21/3mo to disguise your unauthorized file sharing, then you're willing to pay $20/3mo to get it straight from the source. (Possibly even more than the cost of a VPN service, depending on how much of a hassle you feel going to BT sites is)
So, my to answer the title question: No, I think that buying music a la carte is a ship that has sailed. Fewer and fewer people are okay with *buying* digital music files at any price point-- but they will gladly pay for the *service* of getting those digital music files to their computer. I know I would, if it was competitively priced against the competition. (VPN services + Unauthorized File Sharing)
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Basic Economics
I think it's incorrect however to price all Albums at the same price. Each album has a specific price at which profit is maximized (profit through album sales). Sometimes that rate might be as low as $2, or as high $15. While reduced pricing models are great for sales, as long as we have fixed album prices (not market driven), we'll never really no where that optimum price is.
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forget selling individual tracks, sell me a piracy pass
the system is already in place for people to get whatever they want, immediately, for free, it's called bit torrent.
so rather than fundamentally change everything to sell individual tracks at lower prices, why not just add one thing to the mix: a piracy pass.
keep using companies like media sentry to spy on downloaders, keep screwing artists with your creative accounting, keep everything the way it is. just sell me a pass for a reasonable price, say $10-$20 a month, roughly the price of a netflix subscription, an unlimited usenet account, or an anonymous VPN service. i can keep my pass on file with my ISP so when the letters come, the ISP can say "at the time of your complaint, this customer had piracy pass #xxxxxxxxxxxxxxxx which was valid at the time of the alleged infringement". this is pretty much how car insurance works.
it's a voluntary tax, so only the people who want to pay will pay. the piracy infrastructure is in place already, so there's no need build anything new. it doesn't change the way many things work so it's easy to adopt. the various content publishers get money and business continues like usual. everybody wins.
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Re: forget selling individual tracks, sell me a piracy pass
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amazon
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AllofMP3
There's no way I could have paid $10 per album to do the same at itunes. At about the $4 point, ripping the cd myself becomes worth it to me.
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Amazon's Daily Download deals as well as their $5 MP3 albums, are enticing me to buy music. I spend about $20 a week, which isn't going to pay for Jeff Bezos' daily coffee bill, but if there are millions of us spending $10-20 a week buying MP3s, that's a decent profit margin for any e-retailer selling downloadable music.
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Lowering Music Prices
Why music isn't considered so important today is that the big major labels bowed to Wal Mart, Best Buy, Costco and other big box stores years ago and lowered pricing at these outlets.
This devalued the music.
Couple this with a lot of bad music out there; lack of radio and TV video support or narrowed formatting; and the rise of the intenet...music got pummeled.
I do think, however, that companies should introduce tier pricing. Older product online--that was paid for years ago-- should be cheaper than new music, for example.
But there are a lot of reasons today why the consumer will pay $50-$100 for a game but bulk at $10 for a CD.
Lowering prices won't change anything but devalue music even more.
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you talk about metalhit.com, yet your link goes to somewhere else. would it not have been better to just link direct to the source?
**
err, suppose something in this comment should be about the story. I wrote a blog post a few years back about itunes that talked about this.
if you dropped cd prices from $10 to $5 you would not double your sales. it would be more than that. $5 is a cup of starbucks coffee. $5 is less than lunch at a fast food place. $5 is impluse buy. i think the labels would find more and more sales.
the evidence of this can be seen from the initial $10 price for itunes. at the time, most CD's were still in the $15 range.
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The artist finds something they are good at and have passion for and want to make a living doing it. Would you flip burgers for free or work anywhere for free or close to nothing. I guess the artist should live in a tent, flip burgers and make music just to give to you.
It's sad what happened to youth where they do not even respect the artist enough to pay them what they are worth, they know better what the artist should sell to them for without any knowledge of the process, it's just not the download company, but the artist that is getting paid. I guess it's the me world.
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