Readers Respond: Why Albums Shouldn’t Cost $1.50

image from www.inthecity.co.uk Last week, former Warner Music executive Rob Dickens argued that the price of albums should be radically reduced. He thinks that they should cost around $1.50. If lowered to this amount, fans wouldn't think twice about buying music. They would be much more likely to purchase it than download it for free. And the sheer amount of albums sold would make up for the difference in price. Others in the industry like Tom Silverman have suggested otherwise. He believes that the digital single should cost even more.

If it cost $1.99 to get the single, he believes there would be a bigger discount for buying the album. This would make people more likely to buy the whole album.

Hypebot readers had their own opinions on this debate about the price of music.

Music Should Cost More Than Coffee

lms10045 reasoned that the typical price for a new fairly popular release on Amazon is "$7.99, $2 less than iTunes, but still more than a coffee."

This is a now common measuring stick of the price of music. It should cost more than coffee. They said would like to see regular prices for albums to be "5 for a digital download and $10 for a CD." Further down the page, Matt said that $3 seems like a better price point. Mind Booster Noori went one step further and said that if Dickens is talking about digital albums than they should be free.

This line of thinking aligned with Hypebot intern Corey Crossfield. She thinks that, "Either way the future of music is free." Earlier in the comments section, Bombtune said they don't think it will matter. Regardless of price, people will always complain about the price of music. From their perspective, Napster "ingrained in people's brains that music should be free and transferable."

Jeff MacDougal quickly corrected them. "Napster didn't convince people that music SHOULD be free and transferable. It showed them that it IS free and transferable. Which begs the question: Who ingrained in your brain that music shouldn't be free and transferable?" It's an interesting thought—that's for sure.

$1 Albums As A Promotional Tool

However, to Jason Spitz, "It's pointless to try to adjust prices across-the-board, because the value of music varies from artist to artist, based on their audience. That being said, there is some merit to running a $1 promotion for a short time."

His example was the group Fanfarlo. They offered a brand-new album digitally for a $1. Fans got really psyched and it generated a ton of energy and buzz for the band. This got new fans interested; it "gave them an easy, cheap way to get a taste of the music." Offering an album for $1 can work, if you do it right. he explains, "It's not a magic bullet, but it can be a great weapon in your arsenal."

Spitz says that this wouldn't solve piracy like Dickens predicted, but it could help artists build fan bases. They need to offer products that fans are going to pay for.

On this subject, Deano said, "Music consumers will pay for the music they love but the price should reflect something more than the whims of label executives."

Sam K agreed. "These one-size-fits-all proclamations about how things should be are just silly." Saying that, "$1 is the right price point for SOME artists, for others the right price point is free and for some other talented and popular artists the right price point is $10." On the other hand, Chris thought the discussion should shift towards making things more expensive and feature rich. "When you pay more for something, you expect it to be good. And it ends up being good because of your expectations." This is simply behavioral economics at work.

On Supporting Creativity Everywhere

Jeremy perhaps had the best thing to add to the discussion overall though:

"Maybe it's time we all put aside our wonderful but certainly misguided ideas about what 'the future' is going to look like and start thinking about the simpler issue of whether we believe in supporting creativity. And not just anyone and everyone's creativity…  It's my choice to support the artist…

It's your choice to abandon that support… It's all a choice.  If too many people continue to choose not to support the artists, we will probably end up with fewer artists. There will probably be both good and bad consequences to [having fewer artists], but the sooner the discussion can lose that 'hey, get with the 21st-century program' edge, the better."

Do you agree with Jeremy? Disagree with others? Tell us below.

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  1. It’s hard not to confuse price with value. price is an economic factor… and most econ students will recall that in a free market, the price will drop to the marginal cost of the good. The marginal cost of a digital file is zero, or very close to zero. Clearly the value of (good) music is greater than zero… so the question is not how to price the music, the question is what business model supports selling music for more than zero? I think the answer is that some other scarcer good or service has to be combined with it.

  2. As long as I can get a download from an artist I like for free, I won’t pay for music. It makes no sense as a consumer to buy something I can get for free. It doesn’t matter how much I relate to an artist or how much I like them. And there are millions of people similar to me who think the same way. And even more in the generation following me.
    I don’t believe there can be discussions about album pricing tiers or scales until the consumer outlook changes. And it won’t until something happens to change it.

  3. The suggestion to sell albums for $1.50 is an idea that appears to come from old business models. Once again the “package” of a full album gives the illusion that at least the consumer will listen once to the other songs. And that the “marginal” cost to produce is what the market will bear.
    This assumes that the actual costs to produce such as writing, performing, arranging, recording, producing, mixing and mastering are, what, overhead that a corporation pays for anyway? We need to focus on the real costs of the current processes, as diverse as they are, then price accordingly and sell directly and individually as the internet now permits.
    I’d say let the corporations discuss this while the rest of us use the new tools at our disposal and price appropriate to our situations.

  4. Music is porn.
    How many people actually pay to view porn online? I’ll hazard a guess and say 5%.
    That 5% is probably generating 80% of the profit from online porn sites.
    My point being you can get music for free, certainly, just like porn. But when your content is compelling enough (a specific artists…or adult film star) and people identify with it, individuals will pay for it.
    Just like with the multitude of niche markets the porn industry has filled. When someone finds something that fits their fetish, whatever it is, they feel more compelled to pay for it.
    Because after all we are talking about each individuals buying habit.
    If you look at how the porn industry has risen and fell over the years online, you can see how they have managed to monetize their content in a way that makes it at least sustainable.
    It’s up to the artist therefore to determine how they want to market themselves and generate revenue. If they are generating compelling content they should be able to find their own %5 of people to generate their 80%.

  5. Let’s face it Rob Dickens is correct. Artists are greedy as are publishers. Back in the day if an artist made $1 an album in Royalties they had a good deal – so to that end Rob is right.
    Publishers are out of touch with where the business is today – its never coming back, get with it.
    Albums should be no more than $2 max – an albums purpose was to make the investor(the label) money and the artist, more importantly for the artist ‘THE BRAND’ to sell more tickets at live shows and merch.
    The bigger problem is today most artists suck live –

  6. It irritates me that so often in discussions like this one, the argument that “artists are greedy because they want to get paid for their music files” is used. As an independent artist who has spent at least 50 times more on instruments, album artwork, duplication and promotion than what I have been able to earn, I get pissed when I am compared to established artists like NiN, Radiohead etc. Those artists already got lots of promotion from their labels, and now they can sail on that sea and enjoy the free lunch. Millions of fans are already there to support them, and thousands of them will want to own their music on CD of vinyl, so they do have a financial income they can count on (even if it’s less than it used to be). An independent and unknown artist need to build up his presence, and it takes time and cost money. It’s typical that people who don’t make music themselves, suggest that the music should be free. I am afraid that if it is generally expected that music files should be free, artists like me will stop sharing my music on the web. It’s so sad to think that the web is becoming more and more a kind of garbage can where you pick up cheap things for free. – For me, if an artist gives away his music for free, the first thought I get is that his music is crap, since he doesn’t believe that it has any financial value.

  7. As long as I have been in sales and marketing, supply and demand will most likely establish the price of CD’s. The supply of music far outweighs the demand, especially, when many artist are giving it away free or it can be obtained, albeit illegally, for free.
    One area that could help CD sales is to package something with the CD that can’t be stolen? If CD sales are to continue to be viable, then artist and record companies, etc., must learn to give customers/fans added value with the music. There is lots of creative room for music to increase sales, but, it can’t be done with just selling music, generically. There are way too many great and unknown artist out there giving away their music. Most consumers want to hear good music they can connect with, no matter who’s singing it. I have thousands of great artist on my site, that I just as soon hear their music as some top well-know artist. But, the bottom line is get on the ‘valued added train’.
    One question that keeps entering my mind is this: Has anyone thought about asking the fans what they are willing to pay for a CD? Has anyone asked the fans what would make them more likely to buy a CD? If they are willing to pay anything at all?
    Some serious market research needs to be done out in the trenches called consumerism.
    Like it or not, CD’s are a generic product. Make them non-generic by adding value.

  8. You are correct – Free, Free and Free is not good for anyone. No one makes anything.
    Artists are following what other artists do, let people listen for FREE. Wrong.
    You may well listen to a radio station (traditional) for free BUT the station is paying for the rights to broadcast – albeit only the songwriters/publishers in the USA.
    So to that end, take heed and know that so long as you let people listen, for FREE you will never make a living.

  9. You are still in sales & marketing…selling CD’s?
    Today’s generation, kids don’t care about CD’s.
    Forget about stealing them, the only ones on any retails shelves are deluxe versions of pre-released multi artist over sold pop crap – kids won’t steal something they don’t care about or there is NO value to.

  10. I think these discussions are fascinating which is why I engage in them, but the reality is that our debates don’t amount to much. Your last sentence describes exactly what is happening. While we discuss how things should or shouldn’t be, as I type this, actual entrepreneurial musicians are out there paving the way.

  11. Here’s a few facts:
    1. Before digital, no fan or viewer ever paid to watch a TV show and yet actors and networks were getting rich. How?
    2. Payola happens. Why?
    3. Companies spend millions to make ads and commercials… and then spend millions more to get them seen. Why?
    My point? Promotion is a real thing and is very important in a free market. Some people won’t pay for music anymore, but ALL people won’t pay for music anymore… unless than can hear it first. Don’t just assume that “free” is stupid. “Free” without a plan isn’t very smart, but “free” can be a very useful marketing tool.
    If no one hears your music at least once for free somehow, you’ll definitely never make a living selling music.

  12. It irritates me to read comments like this one. It doesn’t matter if I or you or Trent Reznor thinks Music should or shouldn’t be free. The economy and market place already dictate these things. And guess what, the market place says that digital music is free (or close to free). When people do “buy” a digital file, they are really paying for the service that lets them download it. Taking an opinion on what price is right for a download (or even a CD since it’s value is determined by all playable media) is a waste of time. Instead, do this:
    Step one: Actually look at the market (INSTEAD OF ARGUING ABOUT HOW IT “SHOULD” BE). Evaluate how you can profit from it doing what you do.
    Step Two: Create a plan, then do it.
    Step three: If you fail, go back to step one.
    If you don’t fail, still go back to step one and keep tweaking to adjust for the constantly changing market and to improve profits.
    It’s time that people in the recording industry stopped whining and started behaving like people in every other industry.
    And by the way, the ones in our business who are actually making money in this new era are already doing it. They aren’t waiting around for the labels or the government to “fix” anything.

  13. This may have helped….in 1998.
    Free or donate is the only way to get people to even THINK about spending money on music and pinkie ring, dinosaur baby boom, record executives with acrylic in their hair are to blame. They failed SPECTACULARLY to understand that they were in the software business when the 1st CD hit the shelves in the 80’s. You can’t win if you don’t understand the fundamental nature of your product.
    You can discuss the downside of free all you want but it’s the rule now.

  14. Personally, although I like free and/or damn near free music as much as the next man, $1.50 is kind of absurd to me, UNLESS the cost of manufacturing a single, fully packaged album is about $.50. If that is the case, then I can see it.
    One thing I will say for sure is that, trying to charge $9.99 or more for a digital album is ALSO insane. I say, let digital singles stay at the $.99 rate they are currently at (or, even better, affix that as the price of the lossless version of said single) and then allow a tiered pricing for mp3’s, maybe starting with 320 kbps files at $0.79, 256 kbps at $0.59, etc… Then, charge no more than $7.99 for a LOSSLESS version of the complete album, with tiered pricing then in tow, as with the singles.
    Now, being the fan of the actual “physical” product that I am, I say single cd’s should max out at $7.99 with $5.99 sale pricing during first week. Double disc sets and CD/DVD combos should max out at $9.99.
    Now, these are just the prices that “I” know would lead to me spending more money on music. But, trying the current policy of trying to hock lossy versions of albums at prices equivalent to their physical counterparts is ridiculous.
    At the end of the day, the record companies are going to stick to their guns and then just try to blame it on pirating. I really don’t see how an industry can keep selling the same format of product with damn near no improvement in that format with no reduction in price over time.
    If you want to keep your current pricing model, give me SACD’s or something for that price and then reduce the price on regular CD’s. I mean, damn, even Blu Rays have started to reduce in price, as have DVD’s, but yet, CD’s still remain at their golden price point.
    If you’re not going to negotiate in even the least with the same folks you want to give you their money, how the hell are you gonna get the money our of their hands when what you’re selling is not a human necessity?

  15. What if every commenter on this post is right? And each answer is appropriate for the millions input/output combinations of doing business with the actual tools available. Then for me, the decision has been to retain all rights to assets (songs/music) and be as nimble as possible to create and implement your own marketing/sales plan for your specific market. And perhaps I’m sounding like a broken cd here, but I would suggest checking out LicenseQuote.com for an infinitely variable, reasonable and instantly update-able platform.

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