Getting your CD into the hands of the masses = more money

[Vlad!]

http://sivers.org/livecd

If I may be permitted to lapse into market-droid speak for a moment:
* Mind share is more important than profit per unit
* Mind share correlates directly to wallet share
* There is a measurable correlation between availability of the CD and mind share
* In certain markets, allowing the market to directly set the price is a clear win

[murlough23]

This would work great, in an ideal world. I'm sure it has worked great for some bands. I'm not convinced it would work for every band - (I can see parents whose kids drag them to teenybopper concerts being more than willing to shell out whatever price is posted for that CD to keep their kids happy, for example, and I can also see people paying a very low price or nothing at all for a CD if they judge a band's live performance to be lacking, thus making them iffy about the quality of the music and whether it's truly worth paying for), but it would be interesting to see who it does work for.

At the Future of Forestry concert I went to a couple weekends ago, they gave the first 50 folks who attended a pair of "buy one, get one free" coupons. This was because the record label had (perhaps mistakenly) produced 100 more CDs than the band had ordered, so the label just gave them to the band for free, and the band chose to pass the savings on to the fans, with the caveat that the free CD should be for a friend who didn't attend the show. I thought this was a great idea, since their EPs were $6 a pop ($1 per song exactly), with the 50% price slash cutting them down to $3, I bought two EPs that I already owned, figuring that if they were this cheap, I could give them away to friends and get more people into the band. I hope it works!

[Vlad!]

Obviously if you're a crappy enough band that the majority of the people at your concert don't think your CDs are worth paying money for, you're screwed no matter what your strategy is.

My point is that the music industry seems to think that the CD is the product, and I think it's this flawed view of the system that has led to a lot of the problems we have with the RIAA. I think the band is the product and the CD is just one of many tools used to sell the product. If you are in people's minds, you're going to be making money one way or another so long as you're selling something--whether it's CDs or t-shirts or concert tickets--and if encouraging people to take a disc causes you to be in more peoples' minds, you win.

[Brenden]

So, it's basically what Noisetrade does, except at live shows?

[murlough23]

Obviously if you're a crappy enough band that the majority of the people at your concert don't think your CDs are worth paying money for, you're screwed no matter what your strategy is.

Unless you're lucky enough to be on a label that feels like spending the money it takes to move heaven and earth and cram your music down every radio listener's throat. Then you're gold.... at least for a year or so.

My point is that the music industry seems to think that the CD is the product, and I think it's this flawed view of the system that has led to a lot of the problems we have with the RIAA. I think the band is the product and the CD is just one of many tools used to sell the product. If you are in people's minds, you're going to be making money one way or another so long as you're selling something--whether it's CDs or t-shirts or concert tickets--and if encouraging people to take a disc causes you to be in more peoples' minds, you win.

I don't disagree with any of this. It's just gonna take one hell of a big grassroots movement to change the short-term thinking (just make as much of a profit margin as we can manage on this one piece of product right now), if it can be changed at all.

The problem is that way more people buy CDs (or the digital equivalent) than buy concert tickets. CDs are also much easier to sell as an impulse buy. The labels figure the fans are on board either way most of the time; it's roping in the people who might not invest in the band at all, but who can be persuaded to drop some cash for a catchy song. I don't think the label cares all that much if the band develops ongoing fan loyalty, since the label itself likely won't have any relationship with the band a few years from now, given how most record contracts go these days (underperform, and we drop you like hot molasses in um... January... in Australia).

[Vlad!]

So, it's basically what Noisetrade does, except at live shows?

Yes. My gut reaction is that by doing it at live shows bands can see a better return on investment, for two reasons: first, those who go to live shows have already proven that they are willing to spend money on the band, and second, those who go to live shows are more likely to be fans of the band already and will thus be more willing to generate buzz than some random guy who downloaded your album along with ten others. But I think the concept is very similar.

I don't disagree with any of this. It's just gonna take one hell of a big grassroots movement to change the short-term thinking (just make as much of a profit margin as we can manage on this one piece of product right now), if it can be changed at all.

The good news is that the record industry already has one foot out the door. The only thing that's keeping them in power is the vacuum their absence would create. If there were a way for bands to do for themselves what record labels currently do for them, I think other pressures would swiftly serve to topple many of those labels.

The problem is that way more people buy CDs (or the digital equivalent) than buy concert tickets. CDs are also much easier to sell as an impulse buy. The labels figure the fans are on board either way most of the time; it's roping in the people who might not invest in the band at all, but who can be persuaded to drop some cash for a catchy song. I don't think the label cares all that much if the band develops ongoing fan loyalty, since the label itself likely won't have any relationship with the band a few years from now, given how most record contracts go these days (underperform, and we drop you like hot molasses in um... January... in Australia).

Yeah, but concerts tend to be way more profitable to all but the biggest-name bands because a much larger percentage of that profit actually goes to the artists. It evens out

[murlough23]

The good news is that the record industry already has one foot out the door. The only thing that's keeping them in power is the vacuum their absence would create. If there were a way for bands to do for themselves what record labels currently do for them, I think other pressures would swiftly serve to topple many of those labels.

More and more bands are going indie, so I think this is starting to happen. But change takes time. It takes a few brave ones to take the price points off of their merchandise and find out what their fans truly think they're worth. That said, people are inherently selfish, so if this becomes the standard for selling music-related merchandise, you can bet a lot of folks will abuse the system.

Yeah, but concerts tend to be way more profitable to all but the biggest-name bands because a much larger percentage of that profit actually goes to the artists. It evens out

Maybe. But this logic will definitely fall on deaf ears when presented to the record labels. Somehow I think a lot of the bands, unless they're brand new to the industry and totally naive, probably realize this already. Selling the CD or its digital equivalent will always be the label's priority.

NP: "Wake Up", Yoav

[Vlad!]

Selling the CD or its digital equivalent will always be the label's priority.

Well, obviously. Selling the CD is what makes the labels money

Obviously the best way to get the artists out from under the thumb of the labels is to hit the labels where it hurts--the wallet. If the consumers start preferring purchasing venues that deliver more revenue to the artist and the artists start preferring venues that deliver more revenue to the consumer, the labels will lose a lot of their power.

(For the, er, record, I don't think that record labels as a concept are evil, but many of the large ones end up being evil, probably mostly because they can).

[Ian]

So is it safe to say that a band like Animal Collective would be nowhere near where they are today without filesharing?

[murlough23]

So is it safe to say that a band like Animal Collective would be nowhere near where they are today without filesharing?

I wouldn't be a fan. It's a steep asking price to take a chance on a new band like that when you can't hear it before byuing it.

[Vlad!]

So it's obvious that filesharing or otherwise getting creative with track distribution can put a group on the map. But what about those who have already achieved that critical mass of public knowledge? Do you think the model is sustainable?

[bloop]

So it's obvious that filesharing or otherwise getting creative with track distribution can put a group on the map. But what about those who have already achieved that critical mass of public knowledge? Do you think the model is sustainable?

I think it depends on whether the established band is going through the label system, or actively skirting it.  Either way, I think the band can make it work for themselves.

[NinjaRob17]

I think it depends on whether the established band is going through the label system, or actively skirting it.  Either way, I think the band can make it work for themselves.

See: Nine Inch Nails and Radiohead.

[Vlad!]

Yeah, I remember reading about those experiments. I checked Wikipedia to see how In Rainbows did online. This section is especially interesting:

According to an Internet survey conducted by Record of the Day of 3,000 people, about one-third of people who downloaded the album paid nothing, with the average price paid being £4. When asked in a December 2007 interview by The Observer how many discboxes were ordered, the band members responded with various answers ranging between 60,000 and 80,000. In October 2008, a report from Warner Chappell revealed that although most people paid nothing for the download, pre-release sales were more profitable than the total money from sales of Hail to the Thief. The report also stated that the discbox sold 100,000 copies.

The album's download and "discbox" sales were not eligible for inclusion in the UK Albums Chart because the website is not a chart-registered retailer. The week of its retail release, In Rainbows peaked at number one on the UK Album Chart, with first week sales of 44,602 copies.

(Emphasis mine)

You could interpret that in two ways: first, that the profitability was due less to the digital release and more to the fact that a hundred thousand people bought the eighty-dollar discbox, and second, that the profitability was due at least in part to the fact that even though many didn't pay for the album, more people bought the album in aggregate and thus they still made a profit (if normally 3 million people would have paid eleven bucks for your album but instead 6 million people pay six bucks, you win).

You could also make the argument that with more copies of the album out there on prerelease it was better-positioned to achieve the popularity it enjoyed. I'm a little dubious of this argument because it depends on there always being a large base of people who will pay full price for the CD (or digital equivalent). I'm not sure that if price-your-own-download distribution becomes common that will necessarily be a constant. However, the approach seems to be effective thus far, so it's very much worth pursuing and I think quite evidently better than the traditional model the labels have been pushing.

[murlough23]

Funny, I remember a certain blogger ridiculing Radiohead's "pay what you want" scheme for In Rainbows and citing some fact about how they were averaging $5 or $7 or something low like that per album. Clearly this person was playing O'Reilly Factor with the figures.

[Vlad!]

Funny, I remember a certain blogger ridiculing Radiohead's "pay what you want" scheme for In Rainbows and citing some fact about how they were averaging $5 or $7 or something low like that per album. Clearly this person was playing O'Reilly Factor with the figures.

Well, four pounds is about six bucks and change (though I think the exchange rate was significantly more in their favor back then), so that blogger was correct, at least for the downloaded copy. Of course, the important figure isn't the average price per album but total sale price.

[murlough23]

Well, four pounds is about six bucks and change (though I think the exchange rate was significantly more in their favor back then), so that blogger was correct, at least for the downloaded copy. Of course, the important figure isn't the average price per album but total sale price.

Agreed. Just pointing out that some people have interesting ways of twisting the facts when they want an excuse to ridicule something or someone.

[dgp11776]

So, it's basically what Noisetrade does, except at live shows?

An artist joining Noisetrade or Brite Revolution is a good move.  I have Noisetrade to thank for introducing me to The Ember Days, Lovelite, Harrison Hudson, Judd and Maggie, and Rory Partin.  I like all of them on some level.  And I joined Brite Revolution, basically, because of Katie Herzig and Joy Williams.  Now, I have a ton of artists I really enjoy on that site, including Matthew Perryman Jones, Andrew Osenga, Griffin House, Andy Davis, Randall Goodgame, Emily Deloach, Adam Agin, Andrew Belle, Ben Rector, Charlie Hardin, Seth Wood, Stephen Gordon, Drew Holcomb & The Neighbors, and Seth Philpott.  They keep adding new artists, too.  I think they started with 16, and now have 29 on the roster.  One added today, Space Capone, is another which will be a favorite of mine.  I just love all the new ideas floating around to get music out in less conventional ways. 

[bloop]

Buying a downloaded copy for significantly less is fine as far as the band is concerned.  Much less overhead/fewer mouths to feed.

[Vlad!]

Buying a downloaded copy for significantly less is fine as far as the band is concerned.  Much less overhead/fewer mouths to feed.

Yeah...on one hand, it seems inefficient for each band to do their own digital distribution, but the current alternative (iTunes and the like) again ends up keeping more of that money out of the hands of those who created the music. Sites such as Noisetrade seem to be a good step towards bridging that gap.