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Not Priced to Sell

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I’ve been saying this for over a year: digital music is priced WAY too high for it to be either anything close to a good deal, or for it to be appealing vs the price of FREE (not really free – it costs time, the expense of the computer, broadband, but it FEELS like free) with the file sharing services. Cold, calculating, hard-nosed, conservative BusinessWeek agrees:

    After the pilot program ended, Rhapsody lowered its price to 79 cents per download in May. But the service would like the price to go lower. “The music companies have dropped the restrictions on what you can do with the song, and they offer greater flexibility with what you can do with it,” says Rhapsody spokesman Matt Graves. “Now, all they have to do is drop the price.”

    The big record labels deserve credit for finally pulling their heads out of the sand after years of pretending that file-sharing services would disappear. But they need to go one step further. The harsh reality of the Internet Age is that the industry will forevermore be competing against free, pirated music. If it doesn’t slice digital prices to around 50 cents, the market will likely never go mainstream.

    ….Indeed, file-sharing continues to grow despite the industry’s litigation blitz against downloaders, some as young as 12. During the week of Sept. 11, 4.5 million users on average were on file-sharing services on the FastTrack network such as KaZaA, according to Big Champagne, a file-sharing research service based in Beverly Hills, Calif. That was up from 3.4 million users in late August, right before the industry started suing consumers.

    Seems to me the recording industry is facing an important choice: It can ensure the future of the business by helping to create a thriving online-music revenue-generator. Or it can continue to sue downloaders one by one and keep prices higher than what is needed to jump-start the retail digital-music industry. What’s it gonna be, guys?

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About Eric Olsen

  • http://dieselnation.blogs.com Madison, the underground hip-hop news guy

    I like the file sharing services not just because it’s free (or seems free as you correctly mentioned) but also because I find stuff on there you can’t find anywhere else.

    So these legal download companies need to also offer exclusive content if they want my time/money.

  • Eric Olsen

    Excellent point, Madison, thanks!

  • ACM

    I have to say my CD purchasing has at least tripled since I have used KaZaa/Napster…For me, it is mostly a tool to find new music…There not losing money because of me!

  • http://www.waking-vision.com Michelle

    Yeah, but they think they are. Let’s face it: When you find a real cool band (on Kazaa for instance), you go out and buy the album, just because it feels better to actually hold it in your hand. So I would never download a whole album either on Kazaa (e.g.) or a prized service, because I were under the impression to get an inferior product. I’d prefer the real thing – package, cover, booklet.

    In this case you have a connection with the band – you like their music, you want to support them. However, making music more and more a product instead of creative process the music industry has helped building the problem it has now. Why should you have a personal connection to a product? To something that doesn’t feel natural or grown, but made and produced?

  • http://robbedbyafountainpen.blogspot.com BJ

    That’s a good point about getting the whole thing – package, cover, booklet. I download and burn lots of discs (through Emusic, tho’ that’s probably going to end) but they’re definitely inferior to the real thing, largely because of the lack of art, liner notes, etc. Printing a simple songlist is pretty easy, but tracking down and printing the lineup of musicians on each track for, say, Bud Powell live at Lausanne 1963 (as I started to do last night) is a huge pain in the ass.

    Add that to the inferior (but improving) sound quality, and $9.99 for an album is *way* too high relative to your favorite record store.

    Example: Fountains of Wayne is $13.99 (IIRC) at iTunes, a price you can get in stores for new, and $4 higher than used.

    If downloading is going to be hugely popular, they need to be able to at least beat the used price in stores.

  • http://robbedbyafountainpen.blogspot.com BJ

    Er, 1962 – excuse the typo.

  • http://www.waking-vision.com Michelle

    And this is why I would think (illegal) downloads would be no real danger to the music industry if they were able to make music an integral part of life again and not something you consume and then throw away. In the latter case I would also prefer to download the song, hear it for a week and then dump it. But if music isn’t just a product (to which the industry has reduced it), I want to hold something real in my hands.