Bob Baker: Giving Music Consumers These 3 Choices Leads to More Revenue

This guest post comes from Bob Baker of TheBuzzFactor, author of the "Guerrilla Music Marketing Handbook," Berkleemusic's "Music Marketing 101" course, and many other books and music promotion resources.

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Are you pulling your hair out trying to figure out how to make money selling single digital downloads and albums, while also wondering where physical CDs fit into the mix these days?

Well, Scott Cohen may have an answer. He manages a band called the Raveonettes and is the co-founder and international VP of The Orchard. Cohen just wrote an op-ed piece that appears on the Billboard web site. In it he reveals some interesting numbers from music sales data he's been able to crunch.

Here are the figures I found most interesting:

When Raveonettes fans were given a choice between purchasing a full-length digital album for $7.99 and buying a single track for 99 cents, they chose the single track 75% of the time.

As Cohen points out, most of a band's music sales revenue comes from album sales, not single-track purchases. So that wasn't a percentage to celebrate.

So the Raveonettes decided to try something different.

They released three digital-only EPs of new material and sent their fans a new offer. And the results were surprising. When given the choice between a $3.99 EP and a single 99-cent track, more than half bought the higher-priced EP.

Cohen writes, "By providing different pricing and format options, we were able to increase our sales from casual fans who want more than a track and less than an album." He goes on to ask, "Should we consider selling full-length albums on physical formats and dividing the album into three EPs for the digital release? The evidence suggests that this would generate more money."

So here's a possible list of three choices to offer your fans with your next album:

  • The physical CD – Let's say it features 15 songs and cool liner notes on the insert. Price: $15 – or more if you combine it with a DVD or some other type of upgraded packaging.
  • Three digital-only EPs that feature five tracks each. Price: $3.99 each. Take all 15 songs from the album and break them into five groups of complimentary tracks.
  • Digital download singles – Every track is also available for 99 cents each.
This pricing and format strategy would satisfy all three of the fan types Cohen describes in his piece: new fans (who mostly buy singles), casual fans (who may purchase from any of the format choices), and core fans (who purchase almost everything an act produces).

What do you think? Leave your thoughts in the Comments below.

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  1. It’s good to see further verification. Internet marketing and their obsessive split testing proved this to my satisfaction many moons ago, but I like seeing further data on how it applies to music.
    Thanks Bob.

  2. Add another 2 tracks to that $3.99 and I would be on board. It then feels like a more cohesive project with a beginning, middle, and end. Don’t forget a PDF of the album artwork(maybe a different one than the physical)with credits/lyrics.The price for the physical still needs to come down as well as the number of tracks on a cd/vinyl.When you listen to some of the best albums from the past, most of them are well under 45 mins.35-40 is ideal so I would say 10-11 tracks per physical cd/vinyl for $9.99.

  3. I like this – all the more so since the tiering is brought out from experience.
    I agree with Dave about the number of tracks on the album, though it would perhaps depend on the average length. When CDs started to swell way beyond the 8-12 tracks typically found on vinyl releases – Metallica were notorious for this ever since the Black Album – I found that the albums became unlisteanble to in one sitting, which seems to undermine the whole purpose of the project. I found that 45-60 minutes of music works best.
    If the release is planned for vinyl as well, the lower density will also be have to taken into account (a record can typically hold approx. 45 minutes of music), though I have seen releases where 12″ LP was bundled with a 7″ that held the rest of the tracks.
    I’d also price the CD at something like $10 – especially if I were to sell it myself (at gigs, for example). This offers a margin in the region of $8, which is healthy enough. A somewhat higher price may be considered if we need to account for distributor/retail margins.

  4. I will always go for the physical CD option, disregarding the other options there are. I guess I’ve turned into a collector type of sorts several years ago, despite being only a casual fan of some artists whose CDs I’ve got.
    It just bothers me that over the past 2 years, several great pieces of independently released music came out only in digital album format. No CD or even CD-R option was available. It was tough not to buy anything because of the lack of sound quality that the offered digital albums had (128kbps is really bad and 256kpbs is a mere substitute, placebo of sorts, for the real thing which is full CD quality). Since most of the best tracks off of these albums are available for free on youtube, it wasn’t too tough a decision to make either. It’s just too bad that the artists of these brilliant recordings probably won’t see any income from them. And that my friends probably won’t get to hear them either because I cannot play these songs to them. My friends don’t hang around a computer as long per day as I do, you know.

  5. “Three digital-only EPs that feature five tracks each. Price: $3.99 each. Take all 15 songs from the album and break them into five groups of complimentary tracks.”
    Bad math tax. Please to send money to my Paypal.
    Seriously though… I’m working on my next release. For digital downloads (via Bandcamp.com in a variety of audio formats) I will be charging “pay what you want.” I’m still vacillating over the physical CD price, but I’m leaning towards a minimum that would cover actual duplication cost (and postage in case of online orders).
    My last digital EP (howlinhobbit.bandcamp.com) I have set for a minimum of $3. Most people have purchased it for either $5 (which is what I’ve been charging for the physical disc) or $10.
    Your fans will support you. Have some faith in them.

  6. I think it´s great idea. One thing that we do is offer these other options and it works great.
    1. Digi pack thermal print
    2. Digi pack inkjet
    3. Cd sleeve thermal print
    4. cd sleeve inkjet low sat
    It´s great price is never an excuse to buy from us.
    We understood that no type of packaging is going to make your music sound better, and we have the same cd with 4 different prices.

  7. Really? Send us links to non f-ed up good quality versions of all three mp3’s for free. It’s like driving from LA to Portland for cheaper gas that happens to be watered down. People are tired of the crappy low quality unlabeled mp3’s that go around for free, unless it is off a site like mp3.com

  8. It’s absolutely true. Fans are buying in different, new ways. Those artists and labels that recognize and embrace these new buying patterns will succeed.
    Something to keep in mind: iTunes (and most stores that sell digital albums) sell up to 10 tracks for an album price that’s 10 x the single price. That is, if you have a 9 song album, iTunes will sell it in the U.S. for (usually) $0.99 a track, or 9 x $0.99 for the whole album = $8.91. But if you have 11 or more tracks, it caps at $9.99.
    So it can even be a way of monetizing your music more than you normally could: if you break your 15-song album into three 5-song EPs, you’re getting the full royalty from each track, should a fan buy them all as EPs. If you also put up the album entire, they can spend $9.99 and get all 15 tracks (less per-track for you, more money up front; bargain for your fans, but only if they commit to the whole album).
    But be careful! You don’t want fans buying something twice–choice is good, but confusion can make fans spend twice if they don’t know the material isn’t already in something they bought. Don’t annoy your fan base!

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