What Is The Value Of Music, Pt 3 – Christopher Lars Carlson

Part 3 in our series of the value of music is by Christopher Lars Carlson.  Chris is a student at the Berklee School of Music, where he is also president of the Music Business Club.  He manages Tom Howie and can be found on twitter and on his music business blog, A Musician’s Journey, which is filled with great ideas.  The question I asked him was:

What do you think the value of music is?  Is it the $17.99/album that the major labels charged for so long?  Is it the $9.99/album that itunes charges?  Is it the $0.00 that it costs to get music from Pirate Bay?  Is it something else?


This is what Chris said – 

 

d) None Of The Above

Every release needs a goal. Is the goal to gain awareness? then give it away for free. Do you need to make enough money to fund a tour? Then determine what that amount is and estimate how many sales you think you can make. Divide and decide your price point.

It’s my personal belief that there should be options a la NIN (Nine Inch Nails): free, cheap, regular, expensive, insanely expensive.

Depending on where an artist is in their career, only some of these price points will make sense, but the point is that by the next release, they are at a different point in their career and a new strategy will be needed.

To more directly answer your question: I think the value of music is dependent on the relationship between the fan and artist. An UBER fan is going to pay $275 for a release (NIN deluxe box set) but that same person is going to download an album for free from an artist they don’t have a relationship with.

The next guest post will be by Shawn M Smith, formerly of TVT Records and currently the man behind Radio Exile.

What Is The Value Of Music, Pt. 2: Bud Caddell

Part 2 of our series on the value of music is by Bud Caddell.  Bud is a strategist at Undercurrent, blogs at WhatConsumesMe, is a popular fellow on twitter, and is an all around brilliant guy when it comes to the digital world.  We’re thrilled to have his guest post.

The Value of Music

Has music suffered from inflation?

In the 50ʼs, a postage stamp was three cents. Today itʼs fourty-two. In the 50ʼs, a gallon of gasoline was around twenty cents and you could buy a tricked out Ford for two grand. The price of a 10” record, offering around three minutes of playback, was $2.85. A 12” record, up to eight minutes of playback, was $4.85 (source: http://www.fiftiesweb.com/ pop/prices-1950.htm). Adjusted for inflation, $4.85 in 1955 is worth $38.34 today (source). But I can buy a single song right now from iTunes for 99 cents.

Sure, youʼre not pressing that vinyl and youʼre not shipping it out to stores, but everything today, especially producing and promoting music, a band, a single, an album, is astronomically more expensive today than it was then. So why is a single so much cheaper today?

Hereʼs another question, whatʼs the top album in the country right now? Do you know? Without looking, I donʼt know either.

The industry loves to blame the digital format and piracy for the erosion of their business. And as long as they do, theyʼll continue to go the way of the dinosaur – and good riddance. Simply put, music is less culturally relevant today than it was in the 1950ʼs. Bob Dylan wonʼt be reincarnated. That popularity with that cultural message doesnʼt happen anymore. Why? Well, for one, the industry today doesnʼt think like John Hammond did. They arenʼt looking for Dylans. Moreover, todayʼs mainstream is an emaciated corpse of its former self. Our interests and musical genres themselves have splintered. The industry saw demand slipping so they raised the cost of the concert ticket. They hope to sell the song for nothing so youʼll hear the band and want to pay the $50 to see them live. They practically asked for their own irrelevance.

I apologize for the obligatory Radiohead reference, but they sold eight million dollars worth of box sets for In Rainbows. Who cares what percentage of people paid nothing for the album. The promotion and the material were remarkable. They were relevant. And they were entirely fan focused.

Before the Beatles, popular artists didnʼt expect to amass a fortune by playing music. They played to earn one fan at a time. The industry still promotes to a mainstream theyʼve drastically miscalculated. They spend large amounts of money to accrue fans that donʼt exist. And they actively commoditize their own products. As an artist, if you let the industry set your price, youʼre going to fail.

Pricing is relative. I wouldnʼt spend one indian nickel on whoever wins this season of American Idol. But I have my wallet wide open for the next tune by the Fleet Foxes. And my price point isnʼt set at 99 cents either, no matter how much industry people tell us that it is. Give me something worth paying more for and Iʼll eagerly do it.

What Is The Value Of Music – Part 1, Matt Morrell

The first guest post in our series on the value of music is by Brooklyn based indie artist Matt Morrell.  Matt is an indie singer-songwriter in the vein of Conor Oberst, the Mountain Goats and Jeff Buckley.  Not only his is stuff great and absolutely worth checking out but he has some great thoughts on what the value of music is, from the perspective of an independent artist.

To refresh your memory, the question I asked was:

 “What is music worth today?  Is it worth the $17.99/album that a CD retails for?  Is it worth the $9.99/album that you can buy an album for on itunes?  Is music free (or devoid of worth), now that it can so easily by disseminated online?  Does it have some other value or gain value from some other place?”

Matt’s response:

The main thing to keep in mind from a musician’s standpoint is that traditional music sales are no longer anyone’s primary source of income. Just as a hit record today may never be played on the radio, the days of record sales being a barometer of a musician’s popularity are over.

 

Goal #1 as a musician is not to sell your music; it’s to get people to love your music. CDs, in one sense, are leverage that you can use to get your music into people’s minds and hearts, and the price you set on that music is a tool, albeit an important tool, on the road to that goal.

 

Purchasing music is not charity. Ever since Napster arrived, there has been this constant barrage of messages about how artists need us to buy their albums. I don’t subscribe to that argument, and frankly I find the appeal a little obnoxious. The industry around record sales, the same industry that has fifty years of clauses built into record contracts to keep artists mired in debt, they might need record sales, but artists – middle class, working artists – are in a much better position now that their careers aren’t judged by Soundscan numbers.

 

So to get to the question, I think the price of music starts at just around zero and shifts in a kind of auction with the changing context of the work. From a band’s point of view, I think the CD has three ways of looking at its price: the price as a “record,” the price as “music”, and the price as “merch”.

 

As a record, that $18.99 price tag on a CD sitting lifeless in a store is probably more of a liability to you unless you are a successful pop-country artist with heavy radio and CMT rotation. (Pop-country, of course, is the exception in any discussion of CD prices or relevance). Even if you’re lucky enough to get label backing or distribution, you don’t get to see much of the profits from CDs sold at a retail store. People might be paying nearly twenty dollars, but there are lots of hands in that pot and you won’t see much of the money. At best, it’s cool to have your CD in a store next to records like “Blonde on Blonde” and “Crooked Rain, Crooked Rain”.

 

On the other hand, as “music”, an album of mp3s downloaded “illegally” off the internet but played constantly on someone’s iPod could easily bring in $15-$50 a year in merch and ticket sales at shows down the line. As a “legal” download, iTunes and Amazon are kind of doing the job right now, but I don’t know how long it can last. The process of actually loading up and iPod and credit cards and all that nonsense is pretty cumbersome. Until digital music is as easy – and cool – as going to a record store counter and putting down some cash for a 45″ single, that part of the business is transitional at best.

 

Then there is the CD as “merch”. Merch sales are the lifeblood of a band anyway, and CDs are a crucial part of that. There’s a difference between a CD you bought in the store and a CD you buy from a show. It’s a souvenir, and at many shows, you buy it directly from the band itself.

 

And when the band gets a little more creative, there is no limit to how much they could get for a CD, either at a show or over the internet. A band with a great following will easily be able to get $20 a disc on their website for a short-run CD, signed by the band, at very little cost to them. I know some bands have a problem doing this, but music fans love autographed stuff. And why not: you can’t get an autographed mp3. A fan is much, much more likely to fall in love with an album that they have an autographed copy of even if they had already downloaded it for free on the internet.

 

Bands and artists have never had more freedom in setting their own price for their music. There is no set “retail price” anymore, and any band worth a fan’s time will figure out how to set the right prices in the right context. Still, no matter what the price on the music is, who’s paying for it, or what medium that music is on, every artist has to get out there, make great music, connect with their audience and play shows. There is not, nor will there ever be a substitute for passion, persistence, and commitment to craft.

Matt Morrell Myspace

What Is The Value Of Music?

Next week I will be discussing the value of music.  Over the past 40 years, the sale of music has been relatively constant.  Music was sold by the album and the price of an album has been more or less constant.  But now, with the internet, everything has changed.  Music is no longer predominantly sold by the album and in many cases, music is not sold at all.  I think it is very important for the entire industry to ask itself what the value of music is in 2009.  Does music even have any value any more?  I posed the following question to several very smart, very well informed people in various areas of the music and technology world.  Next week I will be posting their answers Monday through Thursday and on Friday I will weigh in with my thoughts.  

The question I asked was: 

 “What is music worth today?  Is it worth the $17.99/album that a CD retails for?  Is it worth the $9.99/album that you can buy an album for on itunes?  Is music free (or devoid of worth), now that it can so easily by disseminated online?  Does it have some other value or gain value from some other place?”

If you would like to contribute to this debate, feel free to sent me your thoughts on the subject at tom@hitsingularity.com.

Social Media Strategy Framework For Bands, Refined

Here is an updated version of the chart I posted yesterday.  This one is slightly more detailed and a bit more accurate.  Thanks to all who contributed suggestions. 

 

basic-social-media-strategy2

If you liked this post then help spread the word and Digg it.  If you disagree with it or think it is incomplete, please let me know.  This is a work in progress and I’d love to get feedback on it.

Social Media Strategy Flow-Chart For Bands

This flow-chart is attempt to create the framework of a basic social media strategy for a band.  The chart shows the basic tools of a social media strategy and it illustrates the primary movement of fans within these tools.  It also attempts to document what the purpose of each site/tool is.  This is by no means a full or complete strategy.  Various other outposts sites or tools can be added (such as a PureVolume page) as desired.  This is also only a framework.  How and to what extend each tool is used is up to the person executing the strategy.  

Note: blogs/press refers to third-party blogs that write about the artist, not an actual artist blog.  That would fall under the “artist website”. 

Edit, 1/6/08: I’ve posted an updated version of this chart here.  It is slightly more detailed and reworked.

 

 

 

basic-social-media-strategy

If you liked this post then help spread the word and Digg it.  If you disagree with it or think it is incomplete, please let me know.  This is a work in progress and I’d love to get feedback on it.

Links

Some interesting and worthwhile stuff I’ve seen recently…

Five Artists That Understand Online Music Marketing 

Absolutely agree with these picks.  These are the artists to watch for innovative online marketing by bands.

Mobile Phones To Dominate Digital Music

Long term yes, short term I don’t think so.  See my comment on link for more.

Album Sales Data For 2008

Physical album sales drop 20%, digital rose 27%, vinyl rose 89%.  More vinyl was sold in 2008 than at any point since 1991.  Vinyl  still only accounts for less than half of one percent of industry sale, however.