5 Musings From A Digital Music Exec Who's Been Doing This A Long Time And Isn’t Even That Old - hypebot

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Karen Allen

Great assessment. The issue with subscription services is that they have to motivate their users to pay. Many of them are "good enough" at free, so it works for most music fans. They need to make free a bit more painful (e.g., more ads) and make paid way more gotta-have-it. Then we'll see real revenues in subscription.

Philip Kaplan

Hi,

Robb, if you're interested, I wrote a response to this article here:
https://medium.com/@pud/open-letter-to-robb-mcdaniels-founder-and-ceo-of-ingrooves-11b2bc746c2f

Philip
Founder, DistroKid

CrewlabHQ

"Inevitably, this model breaks down as their fixed costs rise higher than the low fees they charge you..."

Except fixed costs, by definition, don't rise with increased volume....

Caroline Bottomley

Very interested in your point about meritocracy. Arguably indie record labels created access to great music outside of the dominant/major system. And as long as there is an equal-access internet, then the same will happen with distribution no?

Mike

Hmm.. Got to disagree on the "Meritocracy" front. Yes you might be able to release a project an make $10.00 from it.. But there is no Meritocracy getting you to the top of this game.

Roger Bixley

"Remember when your mom used to tell you that if it is too good to be true it usually is?"

The phrase is: if it SOUNDS too good to be true, it usually is. If it is too good to be true, then you've already established that it's already too good to be true, so it not only "usually" is, it ALWAYS is.

Axion Studios

One problem here is even if a $120 a year subscription is almost 3 times more than the average consumer spends on music now, in order for it to actually matter the payouts need to be equal to or at least nominally in-line with other traditional situatios. Not only are they not in-line, they're highway robbery. It doesn't matter if consumers put more into the pool if most of the pool never makes it to the artists.

Iaretweeting

I feel so much better now, since the upshot of this post is no different than any other in the eyes of a writer: MUSIC HAS BEEN DEVALUED. DEAL WITH IT.

Dean Chamberlain

"Why spend $600/yr for the 50 CDs I want when I can spend $120 and get ALL I want!?!?" Umm - you mean why spend $600 when I get spend $0 on Spotify Free and get ALL I want? "Let's embrace these services as the savior[s] for the music industry." How do you figure? Like the poster said above - gotta make the free services a lot less appetizing somehow before they become saviors.

Dean Chamberlain

...when I can spend 0$...

Chet Cline

Good stuff but even with meritocracy there is still a stunning amount of mediocrity to sift through.

Jhong

First of all, saying that fixed costs increase due to increased demand violates the very economic definition of the phrase fixed costs. Yes, marginal cost vs demand can be noncontinuous, but that doesn't make it fixed. But here's the larger point: most of the costs these guys are describing are also cost factors that are decreasing over time.

When I ran HOTorNOT, we supported over a million users each day. This was over a decade ago, on way more equipment with much higher cost per computing cycle, back when transit cost $1,000 per Mbps. Last year, Instagram sold to Facebook for over a billion dollars with over thirty million active users and nine employees. NINE.

Bandwidth today can be had for under $1/ Mbps. It will continue to drop. Storage costs drop over time as well. That is why Gmail came out with the "x Gigabytes free" model, because they knew that cost per user would drop over time anyway.

Customer Service costs? They would go up if your company's response to more questions would be to hire more heads rather than adjust the product to not lead to those questions in the first place. I know at HOTorNOT by taking that approach, it only took me 2-3 hours a day to support 10 million monthly visitors and over 100,000 paying users. That kind of mentality can be applied to most other functions including accounting.

My only conclusion is that these guys think Distrokid's model can't last because they are projecting their own cost structure on Distrokid.. but here's the painful truth: that's wrong if Distrokid is just doing things more efficiently than you. Less people working there leads to employees that care more, less meetings that waste time, and better product that scales better/cheaper.

I remember a lot of people making these kinds of arguments against Google when they started out. The companies that made those arguments don't exist anymore, and in some cases, the founders of those companies work at Google now.

Good rule of thumb: the guy who is launching public attacks about specific competitors is doing it because he's scared. The guy kicking ass doesn't have to badmouth others, he just kicks ass and customers roll in. Kudos to Distrokid for kicking ass.

Jeffrey Marcus Oshins

Apokaful (www.apokaful.com) doesn't even try to make money. It's not part of the equation anymore. All that's left if to tour and that get old real quick.

JR

Sadly YouTube is now serving the role that radio once did of allowing an artist to promote themselves more effectively. Fans that follow you on YouTube are not filtered out as they are on Facebook and so that is the one place where some form of dialogue can exist without gatekeepers preventing it. I would hope there would be a realization by all these companies that killing the goose is not beneficial to the long term, but the majors seem to have everyone convinced only their geese are relevant these days and sadly their market dominance proves them right, it ends diversity and the richness of the art form of course, but commerce is their goal and celebrity based marketing is their weapon of choice, culture and diversity are dirty words...

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