Posts Tagged ‘distribution’

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The name-your-own-price model: some data

October 26, 2009

WoG distributionIndie musicians are thinking and talking about the name-your-own-price model for digital music (what Radiohead did with their last album). There’s a dearth of data though—Radiohead, for example, never released their numbers. But last week, San Francisco-based indie game developers 2D Boy ran a NYOP birthday sale for their game World of Goo, and they plotted and shared the distribution of how much people paid for it. As well, they surveyed purchasers about why they paid what they did. (You can read their full analysis here.) One thing that really stood out for me—and that has clear parallels to musicians—was the collateral rise in full-price purchases of 2DBoy’s other titles.

The other thing that struck me was that they plotted a distribution of how many people bought the game at different price points. But that plot didn’t take into account how much money they made at each price point – one person who pays a dollar is ‘worth’ as much as 100 people who pay a penny. So I took their data and replotted it, first multiplying the number of people who paid in each price range by how much they paid (this is analogous to something I do in my day job). It’s only an approximation, since I took the amount paid as the mean of each bin but it’s probably a little lower, since a lot more people would have paid the round number than any other amount (for example, for the $2.00-$2.99 bin, I approximated the amount paid as $2.50, but I imagine a lot more people paid $2 than any other number, so that would skew the mean lower). You can see from the graph (click for a cleaner PDF) that people who paid around $5 contributed the most revenue, followed by people who paid $1 and people who paid $10.

What does this mean for musicians? Well, it seems really discouraging that most people paid the minimum amount. But you can think of this group of people as just taking a chance on you, and helping to get the word out. Because when you put it in dollar terms, the many fewer people who paid $1, $5, 0r $10 had a disproportionate impact.

Note, of course, that the NYOP model is a whole different world when you’re dealing with physical CDs, since they don’t have a negligible incremental cost.

(thanks to @zeroday for the pointer!)

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So does iTunes license or distribute music?

March 11, 2009

eminem

One of the reasons I’m not a huge fan of iTunes is because of the discrepancy between how they treat music for the purpose of the consumer and the artist. Regular iTunes music is ‘licensed,’ not sold, to consumers – that’s why you can’t play it on unauthorized computers (this doesn’t apply to the DRM-free iTunes Plus). However, from the point of view of the royalties they pay to artists and labels, they are considered to be a distributor – iTunes pays the same royalty rate as Wal-Mart (about 12%), and not the higher royalty rate that is normally paid for music that is licensed from the label.

This discrepancy got put to the test last week, albeit in an indirect way. Mark and Jeff Bass, of F.B.T. Productions, worked on some early Eminem albums, including The Real Slim Shady. Last week, they went to court in Los Angeles, suing Interscope (a division of Universal) for unpaid royalties. Their argument was that iTunes and other digital music services were the equivalent of manufacturers, receiving a digital ‘master’ and making copies for distribution.  Rather than the 12% royalty, therefore, the artists should be receiving a royalty of 50% – the basis for the argument that they were underpaid.

Well, the jury didn’t buy it. They sided with Interscope and the argument that digital downloads are the modern equivalent of the 45, and that artists should be compensated at the lower rate.

More details at Ars Technica and the LA Times.

MP3: Eminem – My Name Is [buy]

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Some new models for music

February 12, 2009

dcfc-iphone-app

A couple of bands that are using technology in interesting ways…

Groove Armada is making waves with a new model of music distribution. They left Sony last year, and are now in a deal with Bacardi, of all people. Their plan is to reward people for sharing music. You go register at the site (attesting that you’re of legal drinking age, of course), download your first free track, and get a unique link to share with your friends.  As more people get and share the song using your link, you are rewarded by being able to download more songs. I have to admit that I’m less interested in downloading the music than I am in seeing a data visualization of the number, timing, and distribution of how the links spread… (Why yes, I am a nerd.)

Pitchfork is making a big deal about Death Cab for Cutie‘s setting a ‘solid precedent‘ with the band’s new, free iPhone app – I guess they are too hip to have noticed that Pink got there first. Listening Post had a great article last October, in which they make a compelling case that the iPhone could be the new Myspace. It’s pretty clear that cultivating a relationship with fans is going to be a key element of differentiation between bands. Cory Doctorow talks about this in the context of authors, but it’s equally applicable to music:

But what kind of artist thrives on the Internet? Those who can establish a personal relationship with their readers…[who have] the ability to conduct their online selves [in a way] that establishes a non-substitutable relationship with their audiences. You might find a film, a game, and a book to be equally useful diversions on a slow afternoon, but if the novel’s author is a pal of yours, that’s the one you’ll pick. It’s a competitive advantage that can’t be beat.

Putting a direct link to your band in your fans’ pockets seems like a good step forward in establishing this relationship.

MP3: Groove Armada – Chicago [buy]

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How successful was the In Rainbows download?

October 15, 2008

According to today’s NME, Radiohead report that the three months of pay-what-you-will In Rainbows downloads brought in as much cash as 2003’s Hail to the Thief, although they aren’t reporting the average price. On top of that, they sold around 100 000 of the box sets, which included a couple of extra tracks (as well as the pretty packaging, of course). Looks like a pretty solid financial outcome to a good experiment.