Debunking The Claim That Giving Away Music 'Devalues' It
from the debunker's-forum dept
One of the popular claims from critics of this site is that giving away music (or even offering it much cheaper) "devalues" it. We've posted many times explaining how price and value are two different things. A lower price does not inherently change the value of a product. The simplest way to think about is the example we've used before: all of us value air a whole lot. We use it to stay alive. And yet, we don't pay for it directly. But I don't think anyone claims that this "devalues" air. Value is more a determination of the demand curve. How much you value something tells you whether or not you'll buy it at a certain price. If you value something highly, and it's offered at a lower price, you'll buy it at that lower price. That doesn't mean that the value to you has decreased, it means that you've received a surplus (you got more in value than you paid). That's a good thing.Yet, recently, the whole "low prices devalue music" thing has come back again. There was the former record label exec who suggested selling albums at $1.60 and got trashed for wanting to "devalue music." Then, of course, we've written a few times about the indie label Asthmatic Kitty, which had worried that having Amazon offer its new album at $4 might devalue the music, since they believe music "is worth more than the cost of a latte."
Thankfully, Ian Port, at SF Weekly has come along to do a nice job of debunking those claims:
Several have argued that selling an album for less than a cup of coffee or a bottle of water would devalue the art of music. But people -- at least, young people who don't buy much music anyway -- don't judge the artistic value of music by what it costs. If they did, they would look down on artists who give away free MP3s and whose albums were obtainable on file-sharing sites. They don't.It's good to see more people pushing back on the silly "low price devalues music" claim.
The devaluing-the-art argument misses two other important points: First, coffee and water bottles can't be downloaded quickly and anonymously at no cost, while digital music can. Second, paying $3 or $4 for a tangible good (i.e., a cup of coffee you watched a person make especially for you) seems intrinsically reasonable in this day and age, even, I would guess, to a 13-year-old. But paying $10 to download a digital file that's a copy of a copy of a copy -- all of them made at no additional cost -- somehow doesn't.
I'm not saying musicians shouldn't be paid for their work. Selling digital albums for $1 or $3 would not stop superfans from paying $10 or $20 or even $50 for elaborately packaged CD or other hard-copy releases. Vinyl lovers will still pay cash money for virgin 180-gram translucent red plastic with big art. And even the $1 digital album, if it made piracy less attractive and increased sales volumes, could bring artists more revenues than they're currently getting.
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Illustration
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Re: Illustration
Added!
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Can't compare music to air
I can understand why an artist may not want their album sold for $4.00, it could well be the equivalent of stocking it in a discount bin at Kmart. It's cheap, must be because no one wants to buy it kind of perception. Unless I really know the band and have heard their music before, that album is staying in the discount bin.
Also, at $4.00 I can buy two albums or maybe 3 or 4 to be equal to a CD at HMV. But each album will get less play, less appreciation.
I'm all for low prices, but it can't just be done out right.
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Re: Can't compare music to air
Uh, yes you can. Mike's comparison is actually quite valid and serves the purpose very well of illustrating the difference between value and price. You seem to be under the mistaken impression that showing there is at least one difference between two things renders a comparison of those two things invalid. This is not true.
I can understand why an artist may not want their album sold for $4.00, it could well be the equivalent of stocking it in a discount bin at Kmart. It's cheap, must be because no one wants to buy it kind of perception.
This point would have a lot more impact if there wasn't a place where people could download almost any song ever recorded for $0.00. One point that Mike made is that the value that many young people give to music is now disassociated from the price. Value has more to do with the buzz around a band online or [gasp!] the quality of the music rather than what's printed on the sticker on a piece of plastic they'll probably never see.
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Re: Re: Can't compare music to air
Hmmm... that would imply that analogies relating infringement to theft might have some validity. I don't think we're supposed to go there.
Analogies must be perfect! Comparisons can only be made between things that are exactly the same.
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Re: Re: Re: Can't compare music to air
Yeah, I've actually seen (and participated) in some contentious threads about comparing theft and infringement. My point on that was (and is) that they are similar enough to be comparable, but have enough key differences to warrant using the proper term.
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Re: Re: Re: Can't compare music to air
Is every album (or song) of equal value? Why, then, are they priced the same? Arguably, some singles are worth millions of dollars - shouldn't that be the price?
Now to explain the economics of this to you a bit. The price of a CD is the maximum amount of money the MARKET WILL PAY. Oddly - that's pretty much the price of anything. A free market basically makes EVERYTHING a big auction. If the record companies priced a CD at $100, their profits would drop, then they would reduce the price until the maximized profits. That's how product pricing works. You add into that the cost of producing the product and come up with your net revenue - if the net revenue is positive, you make money.
This is all about supply and demand. Now, value plays a part of the demand, but supply can impact price a great deal. And, as has been said here before, infinite supply will eventually drive price to zero - regardless of the value.
Now, this is so obvious that I know you understand it. I also understand why you deny it - it's scary that something we value greatly can suddenly not bear a market price above zero. Unfortunately, something being scary does not change basic economics. The smart move is to accept the market and find ways in which it can still help you make money.
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Re: Can't compare music to air
The other part is that inexpensive goods lowers what I expect to pay for something. The last $50 PS3 game I bought was almost a year ago. Since then, I've been buying $1 games for my iPod or playing $5 games I bought from Steam. Even a $10 game looks too expensive to me now and I certainly won't spend $50 any more. These days, I'm getting more games and spending far less doing so. For me it's good, for producers of big, expensive games, it's bad.
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Re: Can't compare music to air
Then buy less, and listen to less. You can make your own decisions, can't you? Or would you rather have some corporation telling you they are going to keep the prices high and make fat profits from you, but really it is for your own good, so you will appreciate more what you are given?
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Coffee is art, dangit!!
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Re: Coffee is art, dangit!!
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"Devalue"
Or, I guess, three, by someone who is debunking one of the above usages.
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who remembers what they pay for their music
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this is what caught my eye
So far all they have done is throw cash in to the latrine of litigation. If they would actually try manipulating pricing and staggering pricing for scarce goods like limited edition vinyl and cds, then their argument might hold more water.
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Re: this is what caught my eye
Basic economics, if people want want you are selling they will pay what the highest reasonable price. If they don't you have to lower your prices. The problem with the music industry is they can't lower prices.
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Re: Re: this is what caught my eye
It's just good business.
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stupid analogy
How much you pay for something has nothing to do with how much you like it - it's a ridiculous argument. I've got music that I got for free that I value much more than music I paid $20 for.
Yes, there once were discount bins filled with crappy music, but even there you could find gems. I once found a Bill Nelson CD for $1 in a discount bin, and it turned me into a fan. I now have most of his music, and most of it I paid more than a $1 for. The discount bin was a place you could take a chance on something new and not feel like you wasted your money if you didn't like it.
Naxos continually sells classical music at a discount rate, yet they have some of the best classical recordings out there and they cover the whole gamut of classical music. I don't know why Naxos isn't heralded more as an alternative business mode, but they certainly aren't less valuable than the major labels.
If you want to question the value of anything, question the value of that cup of coffee or bottle of water.
But look at it this way - if an album costs $10, maybe once a month I'll buy one and an artist will get paid. If it costs $1, I might buy 10 a month and 10 artists will get paid. Plus I'll take chances on artists I've never heard of, instead of saving that $10 to buy the artists I already know. Artists will develop a larger fanbase to market to in the future for concerts, videos, fan clubs, merchandise, deluxe packages, etc. $1-$3 sounds great and appropriate for mp3 downloads.
Almost all of the artists I value and spend my money on were originally discovered by getting their music cheaply - usually free from radio or last.fm or the public library. That's how I became a fan of Elvis Costello, and now I'm ready to buy his next album. See how it works!
Unfortunately, this means long-term management of artists, which the labels don't want. They'd rather make musicians indebted to the label with an advance, squeeze three to five albums out of them, market them so much we're sick of seeing their faces, and then hang them out to dry while keeping most of the money.
If the artist is lucky, they're left with a constantly dwindling fanbase to build a long-term career on, but they're usually viewed as washed up or has-beens because they no longer have access to the spotlight that the major labels absolutely control - radio, television, magazine covers. If the artist can somehow manage to stay visible for 20 years or so, nostalgia kicks in again and they make a comeback and are revered as venerable and important artists and an influence on everything that happened after them - but still everyone just want to hear the music from their original big studio albums because it reminds them of their childhood, and they never bought the artists other albums anyway.
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Understanding Economics
CEO's know the terms that economists use, and they know how to throw around those terms in an argument or when talking to a reporter. However, they have no feel for what the terms mean or how the underlying economic principles work.
If you want someone who actually understands economics, talk to a modern teenager. I work with older teens and today's kids are really sharp about some things. Unlike kids 20 years ago, these folks understand economics at a gut level. It doesn't matter at all what whether ACTA gets adopted or DCMA safe harbors get repealed. These kids will kill the recording industry in its current form. It is simply irrelevant to them, and they are not going to spend more money than they have to in order to get music they like.
If the recording industry is going to survive its leaders are going to have to understand economics as well as these kids do. People in their teens and twenties will spend money on music, but they are not spending $15 for a plastic disk, and they are not paying $10 for a music download. The only music businesses that will be left standing five and ten years from now are the ones who figure out what young people are willing to spend their money on.
We are talking music here, but the movie and gaming industry should be taking notes.
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Re: Understanding Economics
"It doesn't matter at all what whether ACTA gets adopted or DCMA safe harbors get repealed. These kids will kill the recording industry in its current form. It is simply irrelevant to them, and they are not going to spend more money than they have to in order to get music they like."
Do you think of what the french are doing, subsidizing half the cost of music will work to retrain the youth of the nation to buy music? (big ole snicker - No)
Or is it a total "FAIL"? (Yes)
Do you think lowering the price will help? (No)
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Re: Re: Understanding Economics
They are not training kids to buy music. They are teaching them that they paid for the music in the subsidy, and that they now feel entitled to an all-you-can-eat buffet. Hadopi is teaching them to encrypt their internet connection and to spoof IP addresses.
>>Or is it a total "FAIL"?
I don't think "FAIL" is a strong enough word.
It might prop up the businesses that are collecting the money, but those businesses will have less and less to do with producing the music that the consumers are looking for.
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Re: Re: Re: Understanding Economics
Perhaps I should have asked do you think this educational campaign is going to do any good.
"Hadopi is teaching them to encrypt their internet connection and to spoof IP addresses."
Isn't it wonderful! What MI6, the NSA, and pretty much every Intel agency warned about is beginning to happen. At this rate in 10 years everything will be encrypted.
"I don't think "FAIL" is a strong enough word."
Does "catastrophic failure" work for you? :)
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Cost of a CD
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value v. price
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Pricing can affect perceptions
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If you give away music, you do create the expectation that music should be given away. If you make your livelihood taking a cut of music sales, you're going to want music to sell for a high price and you won't appreciate people doing things that tend to lower the price.
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Re:
That's the point. They are using it wrong. To quote "Princess Bride", "You keep using that word. I don't think it means what you think it means."
And by using it wrong they are confusing the casual observer. Perhaps intentionally.
The market doesn't care what someone selling something wants to sell it for. I'd love to sell my used mattress for $1 billion dollars, but the folks on Craigslist only will pay $20. Welcome to basic economics.
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Re: Re:
The people making this argument aren't using the same definition of value that you are. Yes, value and price are not the same thing, but they're using the word to mean price.
That's the point. They are using it wrong. To quote "Princess Bride", "You keep using that word. I don't think it means what you think it means."
And by using it wrong they are confusing the casual observer. Perhaps intentionally.
The market doesn't care what someone selling something wants to sell it for. I'd love to sell my used mattress for $1 billion dollars, but the folks on Craigslist only will pay $20. Welcome to basic economics.
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Re: Re: Re:
That the market doesn't care is exactly the point. We shouldn't be surprised that the guy who needs mattresses to sell for a billion dollars to keep his business model going doesn't like it.
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Price is NOT value
Sure many things that you consider valuable have a price, but most things you consider most valuable do not have a price, and cannot be purchased.
AT ANY PRICE. Some things can have great value and zero price or cost (you value to air you breath, its free).
You value youlocal environment, the trees, the beaches and so on, you value you pet far more than the price you paid for it.
You might have purchased the first edition of 'action man', its price might have been 25 cents, but its value has nothing to do with its price.
So trying to tie value and price together for the sake of a 'story' or to prove some 'cause of Mikes'. Is a stupid article from the start.
The guy in the cartoon probably values love a great deal, but like most people (or round things) he is not willing to put a "PRICE" on love.
Ofcourse, it does not go along with Mikes mind set that some things can have invinite value and zero price, or very high price and have NO value.
If I dont want something, no matter how much it costs, or how cheap it gets if I dont want it it has zero value to me.
Would the Mona Lisa be any less valuable, if it's price was less ? I think not..
At least Mike, learn the difference between value and cost. Or try to convince us that they are the same, and give examples of why you think so.
And show some things you value greatly that you could not buy, (like the love of your family or your pets loyality).
Or the air you breath, the place you live.
Or even the value of knowing that you are not being hunter by police because you obey the laws. What value do you place of such things, and therefore in your world, what PRICE do you place on them..
How can you possibly confuse the two terms, its simple enough.
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What value of Love ? what value a puppies love, where and for what price can I buy that ?
Love is priceless
CANT YOU PRICE THE VALUE OF LOVE ?
No.. But its highly valuable, and its free.
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Re:
And many of us are paying for it in the form of environmental protection that may add to the short-term cost of energy supply, but will be better for the earth over the long term. Similarly what we may not be paying for water at the moment (although most of us do pay for water in the form of monthly bills) will be a cost to future generations if we have planned poorly and left them with inadequate supplies. (It's already happening in farm areas in Colorado as farmers and cities fight over water rights.)
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