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Lady Gaga Says $0.99 Albums Make Sense, Especially For Digital

Business Models

from the understanding-how-this-works dept

Fri, Jun 3rd 2011 8:02am — Mike Masnick
You may have heard that Amazon did a deal recently with Lady Gaga, in which it offered up her entire new album for $0.99. While Amazon did have some technical difficulties in making this work, it resulted in some mindless criticism, in places, that Gaga was "devaluing" her own work. We hear this argument all the time, when it comes to free music, as well -- where people suggest that giving away music "devalues" the music. This shows a fundamental misunderstanding of the difference between price and value. Just because something is cheap, it doesn't mean that the value is diminished.

In an interview with the Wall Street Journal, where Lady Gaga is asked directly about this issue, she almost seems offended, and notes that, especially when it comes to digital, pricing an album at $0.99 is perfectly reasonable, since it helps spread the music. After being asked if she thought her album was "worth" more than $0.99, she emphatically replied:
"No. I absolutely do not, especially for MP3s and digital music. It’s invisible. it’s in space. If anything, I applaud a company like Amazon for equating the value of digital versus the physical copy, and giving the opportunity to everyone to buy music."
This isn't too surprising, given Gaga's previously stated views on her use of free to get her music out there, as well as her encouragement of people to download unauthorized copies. However, it's nice to see her make this point again.

Now, to be fair, she also notes that Amazon covered "the difference" with these albums as part of a promotion -- meaning that she (well, her label) got more than $0.99, but that's a separate issue than the whole question of the "perception" from giving away the music at such a low price.

Later in the interview, she makes another point that we've been making for a while, which is that record labels certainly make sense for some people, but the exciting thing today is that you don't "need" the label any more. She points out that she certainly needs her label, which is great, but that many artists don't need to go that route, saying, "not everybody needs a record label" any more. She also points out that the really valuable thing she's done is build a really strong connection with her fans, and it's that kind of authentic connection that makes her audience so valuable. These are all points that plenty of us have been making for years, and it's great to see such a prominent musician making the same points.
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Filed Under: business models, economics, free, lady gaga, music

60 Comments

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  • icon
    rubberpants (profile), 3 Jun 2011 @ 8:10am

    Lady Gaga just wants free music.

    [ link to this | view in chronology ]

  • icon
    Zacqary Adam Green (profile), 3 Jun 2011 @ 8:18am

    She should wear a dress made of MP3s at her next concert.

    [ link to this | view in chronology ]

  • icon
    Josef Anvil (profile), 3 Jun 2011 @ 8:28am

    Of course she doesn't care

    Last I heard, Lady Gaga is one of those artists that has a 360 deal. If I am correct in my understanding, her label is willing to lose a little on recording sales because they get a chunk of EVERYTHING she does.

    But it is nice to here her speak out for reasonable priced music. The industry probably wants a million more Gagas ( they just wish they could price her higher ).

    [ link to this | view in chronology ]

  • identicon
    Dave, 3 Jun 2011 @ 8:29am

    Makes complete sense.

    Now just get ebooks in that same range.

    [ link to this | view in chronology ]

    • icon
      Dark Helmet (profile), 3 Jun 2011 @ 8:58am

      Re: Makes complete sense.

      Some authors (cough ahem LIKE ME sneeze) do sell eBooks for $.99. In fact, shameless plug aside, the Kindle store is full of them....

      [ link to this | view in chronology ]

      • icon
        rubberpants (profile), 3 Jun 2011 @ 9:23am

        Re: Re: Makes complete sense.

        I know several people doing very well selling $0.99 ebooks. They're eating the big publishers' lunch.

        [ link to this | view in chronology ]

        • icon
          zegota (profile), 3 Jun 2011 @ 11:38am

          Re: Re: Re: Makes complete sense.

          And I know several people selling on kindle who make 2 sales a month, as well as several people with mainstream publishers making high-six figures. Anecdotes FTW!

          [ link to this | view in chronology ]

      • identicon
        Dave, 3 Jun 2011 @ 9:34am

        Re: Re: Makes complete sense.

        Can I just paypal you the .99 and have you email it to me? Not a fan of kindle's reader.

        [ link to this | view in chronology ]

        • icon
          Dark Helmet (profile), 3 Jun 2011 @ 9:42am

          Re: Re: Re: Makes complete sense.

          No, but you can go download it for free from DocStoc and then pay the $.99 at Kindle if you think it's worth it. Would that work for you?

          http://www.docstoc.com/docs/78232116/Midwasteland

          [ link to this | view in chronology ]

          • icon
            Dark Helmet (profile), 3 Jun 2011 @ 10:19am

            Re: Re: Re: Re: Makes complete sense.

            I should also make clear that the highest praise you could give me would be to share this as widely as possible, assuming you like it enough to do so. That includes emailing it to others, pointing people to the DocStoc page via social media, or putting it up as a torrent.

            Hell, I'd gladly give you explicit written permission to do so...

            [ link to this | view in chronology ]

            • identicon
              Dave, 3 Jun 2011 @ 10:24am

              Re: Re: Re: Re: Re: Makes complete sense.

              Hell, I'd gladly give you explicit written permission to do so...

              I'll just point 'em to this comment :P

              I've tried DocStoc. Holy cow. Can't get past the "sign up for premium membership" page. Any tips (or other links?)

              [ link to this | view in chronology ]

              • icon
                Dark Helmet (profile), 3 Jun 2011 @ 10:28am

                Re: Re: Re: Re: Re: Re: Makes complete sense.

                Wait...really? You can't DL it w/o signing up for a premium membership? I don't think that's right.

                Whatever, just email me at tim at diggrp.com and let me know what form you'd like it in (PDF/EPUB/DOC/DOCX)...

                [ link to this | view in chronology ]

    • identicon
      Paula, 10 Jun 2011 @ 6:30am

      Re: Makes complete sense.

      Hear! Hear! Charging more than $10 for an e-book seems like a rip-off. And considering how much I read, costs me a good chunk of change.

      [ link to this | view in chronology ]

  • icon
    Thanatossassin (profile), 3 Jun 2011 @ 8:30am

    I hate to say she has a brain on her, but that's just me being biased and irritated towards her music. Either She or her management knows how to drive a pop market; music is the advertising, concerts are the income, so might as well push that crap out for free.

    [ link to this | view in chronology ]

    • identicon
      Rich, 3 Jun 2011 @ 9:21am

      Re:

      Why should you begrudge her having intelligence just because you have differing tastes than she?

      [ link to this | view in chronology ]

  • identicon
    Loonesta, 3 Jun 2011 @ 8:34am

    Her album didn't stay priced at 99 cents. Temporarily lowering the price to garner attention doesn't amount to something worth noticing here. If she'd permanently lowered the album prices of her entire catalog to 99 cents she'd be making good her word.

    [ link to this | view in chronology ]

    • icon
      Chuck Norris' Enemy (deceased) (profile), 3 Jun 2011 @ 9:11am

      Re:

      You forget, she probably doesn't really own her albums. She (It?) seems to know that digital albums are priced too high from her comments. But you can blame that on her label.

      [ link to this | view in chronology ]

  • icon
    Eric Goldman (profile), 3 Jun 2011 @ 8:40am

    Yes, but she also is overreaching with copyright law to control how photographers take pictures of her. http://www.rollingstone.com/music/news/photographers-respond-to-lady-gagas-new-copyright-demands-201 10307

    [ link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Jun 2011 @ 9:29am

      Re:

      I don't see the problem with what she's been doing. I mean its not like its a public event, or a private event set up by the photographer. Granted what she is asking is a little difficult to control in regards to the thousands in the audience, however it does limit the access granted for up close photography. However the event is a private (purchased access) event, arrange by, and performed by Lady Gaga (by Lady Gaga in this statement I mean her, her producers, and her support staff). They arrange the lighting, they arrange the costumes, they arrange the poses, and yet a unrelated photographer has the right to snap a picture and claim rights to the picture even though all of the creative work is done by Lady Gaga and her crew?

      [ link to this | view in chronology ]

      • identicon
        Anonymous Coward, 3 Jun 2011 @ 11:32am

        Re: Re:

        This exact attitude is one of the recurring problems in these debates. You say ALL of the creative work is done by someone else, but that seems to devalue the photographer's role. It can be very difficult to get that perfect frozen moment in time and a good photographer knows how to capture that, and it certainly can be hard work. I am sure the photographer thinks that the PHOTOGRAPHER does all of the work, and would exclude Lady Gaga and her crew. That doesn’t seem fair either. So many people seem to overvalue the work of one party ( usually themselves) and undervalue the work of another. Maybe it would make more sense to SHARE the credit for the creative work.

        [ link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Jun 2011 @ 2:56pm

      Re:

      While Lady Gaga’s attitude on labels may seem forward looking and her attitude toward these photographers may seem draconian and thus opposite, both may be related to an underlying idea – the idea that some artists have no need for labels and that some artists also have no need for photographers. Artists can do it all on their own now. Or at least some can.

      [ link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Jun 2011 @ 8:47am

    Lady Gaga is pretty smart for a guy.

    [ link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Jun 2011 @ 8:54am

    Bravo Gaga, record labels you listening up??

    The biggest and top selling artist in the world right now is telling you what we've been saying all along.

    The change is coming!

    [ link to this | view in chronology ]

    • icon
      Blatant Coward (profile), 3 Jun 2011 @ 2:00pm

      Re:

      Too bad the 99 cent version is censored by Amazon. I'm willing to wait for it to be at the used CD store to get it without the amazon nannyism.

      [ link to this | view in chronology ]

  • identicon
    Charles Jones, 3 Jun 2011 @ 9:02am

    Good For Lady Gaga

    I agree with the queen of freak herself: digital content should be cheap! Cheap!! CHEAP!!!

    They'll make it all back on the tours.

    [ link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Jun 2011 @ 9:19am

    She sold more than a million copies of her latest album, and I doubt very highly that more than a small percentage were sold at a low price. She can talk all she wants, but the reality is that her albums are priced like everyone else's.

    The only difference? She's a total media whore and knows how to get coverage everywhere, including here.

    [ link to this | view in chronology ]

    • identicon
      Rich, 3 Jun 2011 @ 9:26am

      Re:

      Wait, artists shouldn't promote themselves? You ACs will bitch and moan about anything in your clueless attempts to vomit a relevant point.

      [ link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Jun 2011 @ 9:48am

      Re:

      You highly doubt a small percentage were sold at $0.99?

      I guess that makes perfect sense. I mean, if I wanted to buy an album, I probably wouldn't buy it at the cheapest price point available, you know, because I'm not a human being.

      [ link to this | view in chronology ]

      • identicon
        Anonymous Coward, 3 Jun 2011 @ 12:30pm

        Re: Re:

        I doubt very highly that more than a small percentage were sold at a low price. I suspect that would be a special, a limited number, a limited time, etc. Basically, most people would have paid a price in the range of $15 for the same thing.

        You would want the low price point, but I doubt very many people actually got it.

        [ link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Jun 2011 @ 2:26pm

      Re:

      Hits Daily Double credited the bulk of Gaga's first-week digital sales to the Amazon deal. http://www.hitsdailydouble.com/news/newsPage.cgi?news08553

      [ link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Jun 2011 @ 9:39am

    Gaga's a guy?! Noooooo!!!!!!!!!

    [ link to this | view in chronology ]

  • identicon
    John Doe, 3 Jun 2011 @ 9:42am

    She knows she doesn't get paid on album sales

    From my understanding, she (or any artist) doesn't get paid all the much on album sales so getting the music out there will fill her concerts where she does get paid. Sounds like she understands the value of free and the new business models around it.

    [ link to this | view in chronology ]

  • identicon
    jake, 3 Jun 2011 @ 9:51am

    there was an article on NPR this morning that had more information as well. It even dips into some CwF +RtB

    http://www.npr.org/blogs/therecord/2011/06/02/136852702/born-this-way-and-the-end-of-the-alb um-as-we-knew-it

    btw, 440,000 of those 1 million copies were the $0.99 amazon downloads. not to shabby.

    [ link to this | view in chronology ]

  • identicon
    Joel Coehoorn, 3 Jun 2011 @ 10:00am

    Value vs Price vs Worth

    Price vs Value is something mentioned frequently here. I'd like to replace "value" with the new term "Worth", and use its to come to a better understanding of how all three work together in a way that helps explain what's going on with digital goods.

    Now, we can define "Worth" as the total benefit (including both monetary and other benefits) to an individual or society. Clearly, cultural works like music, art, and film have great worth to our society.

    Price is, of course, separate from Worth. In fact, Price for a work should _always_ be less than the Worth of a good (but perhaps somewhat more than it cost to produce). If a good were not worth at least the price, no one would buy it.

    From the perspective of the consumer, "Value", then, is the difference between Worth and Price. The greater the difference, the more Valuable the good is to the consumer.

    I say all this because it speaks directly to the idea the a low price for an album devalues it. In fact, we see here that the opposite is true: lowering the price of an album _increases_ the value created from the work.

    [ link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Jun 2011 @ 10:15am

    I really don't like her music or image but I have to give kudos on this. We need more musicians to come clean on this topic.

    Boycott the RIAA

    [ link to this | view in chronology ]

  • identicon
    hank, 3 Jun 2011 @ 10:57am

    HIGH prices that devalue products

    When you set a price tag on an infinitely reproducible collection of bits, You are essentially removing any potential value from the product in the eyes of the consumer, making it undesirable because of it's unnatural price. It's HIGH prices that devalue products, not low ones.

    [ link to this | view in chronology ]

    • icon
      zegota (profile), 3 Jun 2011 @ 11:44am

      Re: HIGH prices that devalue products

      So you're essentially saying that selling digital goods for ANY price makes it worthless? This is very much the opposite of true, or at the very least, not true for everyone. Many people, myself included, are perfectly comfortable paying for mp3s. Now obviously there DO need to be price considerations, but saying "charging makes it worthless" is silly.

      [ link to this | view in chronology ]

      • identicon
        hank, 3 Jun 2011 @ 12:48pm

        Re: Re: HIGH prices that devalue products

        Yes.

        [ link to this | view in chronology ]

        • icon
          zegota (profile), 3 Jun 2011 @ 1:01pm

          Re: Re: Re: HIGH prices that devalue products

          Do you have any evidence to support this, or are you just talking out your ass? For instance, the fact that tons of people buy digital mp3s and ebooks seem to suggest that a pricetag does not, in fact, make digital goods "worthless," at least to many people.

          Unless you're trying to argue that they're worthless because you can't resell them, which is a hilariously poor argument, as people have paid for unresellable services since the beginning of time.

          [ link to this | view in chronology ]

          • icon
            The eejit (profile), 3 Jun 2011 @ 2:23pm

            Re: Re: Re: Re: HIGH prices that devalue products

            Technically speaking, they are 'priceless', as in, they have no price. This is not the same as having no value. The value can often be in the way the product intersects.

            As an example, I'll use Good Old Games. They sell older videogames and try and ensure compatibility with modern tech. Now, for most of these games, there is no DRM. However, there is a premium, and the items are all in one place. The value here is convenience.

            [ link to this | view in chronology ]

          • identicon
            hank, 3 Jun 2011 @ 7:31pm

            Re: Re: Re: Re: HIGH prices that devalue products

            OK, sure. check out the above poster's comment on value v. worth v. price, value should be what satisfaction you experience paying for an item, worth should be what it means to you and how you can exploit it, price is what is set by the seller. In an era where a digital network reduces the price and worth to just north of zero, crazy things happen in the calculation of value, you can still exploit infinite value from a priceless item, it's not anything new, radio figured this out 50 years ago. look at craigslist, 99.99% of their "product" is free, but it has tremendous value, they still manage to PRINT money. every album gaga gives away for free, increases the value of the concert ticket, which in not infinitely reproducible, therefore increasing the demand in the marketplace, and affecting the price.

            [ link to this | view in chronology ]

  • identicon
    Brian, 3 Jun 2011 @ 3:13pm

    From the article:

    "Just for perspective, that means a larger number of people bought Born This Way for 99 cents from Amazon last week than have bought any album at all, in all formats combined, in any single week all year long."

    Hopefully we start to see more albums priced like this.

    [ link to this | view in chronology ]

  • icon
    Jeni (profile), 4 Jun 2011 @ 10:13am

    Good Gaga

    Well, while she looks ridiculous to these tired middle aged eyes, and that name! But the girl's got some brains under her fluff.

    Had to laugh at the idiot interviewing her; he sounded so appalled at the 99 cent deal. LOL

    To me her music has zero value as I've only just heard of her about 2 weeks ago and am not at all interested (yeah, I know, never mind...) but more power to her. May she never travel the path of Brittany Spears.

    [ link to this | view in chronology ]

  • identicon
    RRW, 5 Jun 2011 @ 6:55pm

    Lady Junk

    is what's under the hood and she's definitely thinking like a consumer regarding the music.

    A world without music would be like a world without air to breathe, absolutely unlivable.

    Last I checked, air is still free.

    [ link to this | view in chronology ]

  • icon
    alex (profile), 14 Jun 2011 @ 4:37am

    $0.99 albums certainly make sense.... if Amazon is paying the difference!

    Saying artists don't need labels is fine when you're signed to Universal - who sealed deals with Amazon, Farmville, Best Buy and HBO to promote your new album.

    [ link to this | view in chronology ]


iPad 2 Price Drops From 'Arm And A Leg' To More Reasonable 'One Kidney'
Would People Stop Using Mobile Phones If More Evidence Shows Them To Be Carcinogenic?
Guy Asks For Software Crack, Creator Provides Free App Instead
Band Lets Fans Create Customized Album... And Help Sell It (Allowing The Fans To Make Money Too)
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