Should New Albums Cost $1?

image from www.londonmet.ac.uk Rob Dickens, a former Warner Music executive, told BCC News that he thinks music prices should be radically reduced. He thinks that is albums were marked down to $1, sales would explode. If fans wanted a new album, they’d just go buy it.

At a time when some in the industry are worried about fans thinking that music should cost less than their cup of coffee, Dickens thinks that it should cost as much as a double cheeseburger. He thinks that major albums would sell 200 million copies and make up for their lackluster performance as of late. To Dickens, this would also solve the piracy problem.

Should new albums cost 1$? Would this actually solve file-sharing?

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  1. 1 USD or 1 GBP isn’t that far from free…which is what your average teenager thinks music should be priced at these days. And with Amazon pricing albums at anywhere between $1.99-3.99, with a ton averaging just $5.00 in any given day/month, why not $1.00? Can’t reclaim the old $9.99 model at this point folks…and it’s foolish to think otherwise.

  2. From a consumer perspective I think I would buy more music on a whim if albums cost only $1.00.
    The issue comes when you get into the details.
    The current mechanical royalty rate would need to be reset if albums went to $1. An album with 8 tracks or more and without a controlled composition clause would owe more in mechanical royalties than was brought in by the sale.
    Most digital distributors take 30% off the top. $1.00 – 30% = $0.70
    8 songs x $0.091 mechanical royalty = $0.728 mechanical royalty obligation on a $0.70 revenue.
    With the current royalty rates set the way they are perhaps a retail price of $3.00-$3.50 for a 10 track album would work better for all parties.

  3. It wouldn’t solve file sharing, but it would change the playing field.
    I think the ultimate “solution” – if you want to call it that – would be a subscription service. For $20 a month, download unlimited albums from iTunes – or something similar. Sure, people will still steal music despite this – just like people still steal cable despite it being widely available – but I think people would be willing to subscribe if iTunes becomes more of a library than a store.

  4. Pssst–Hey Rob Dickens. A paradigm shift has occurred and you and your former associates have been left behind.
    I’ll take my advice from someone who can succeed in the current environment, and you are unqualified.

  5. If he’s talking about “digital albums”, than it should be FREE. And notice: the difference between paying 1£ and 0£ is *huge* in comparison between paying 1£ and 4£. If he’s talking about physical editions (CD, vinyl, tape, whatever), then 1£ is too low to make labels break even.

  6. I think people will always complain about any price point on music ever since Napster ingrained in peoples brains that music should be free and transferable.

  7. Well, as a regular Amazon MP3 shopper, that isn’t exactly right. They do have a Daily Deal every day, but most of the time, it isn’t something most people would want. They also put 100 albums on sale a month for $5, but it typically is either older albums or a Pitchfork indie darling unknown by the masses. On the other hand, I have seen hot new albums priced at $11.99 (absurd price for a lossy file IMO). The typical price for a new fairly popular release is $7.99, $2 less than iTunes, but still more than a coffee. If I could have my wish, I would like to see regular prices for albums to be $5 for a digital download and $10 for a CD. And then once in a while put albums on sale for even less.

  8. interesting idea. $3 seems like it might be a better price point.
    I think some sort of subscription service with a monthly fee for unlimited downloads would be ideal, royalties could be distributed in a similar fashion to performance royalties. How many years out do you think we’re from streaming ipods from the cloud?

  9. I think the idea is a bit dated and is probably why this guy is no longer working at WBR or because he was a Tom Whalley follower. Either way the future of music is free. I think the idea of charging for something people can otherwise get for free is antiquated.
    The way for music to work in the future is either sponsorships with major brands or giving music for free and earning revenue elsewhere.

  10. Sorry if that was too douchey, It was meant in humor, not to be mean. Gotta lay off the coffee after 3PM on Friday.

  11. 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. Giving away a whole album for free makes it seem like the music is worthless, so fewer people will take advantage of the offer (that’s why Craigslist’s “free” section is always overflowing with old couches). Charging $10 for an album puts a big barrier up to potential new fans. But $1 is an impulse-buy price that many people would go for (hence the popularity of $0.99 iPhone apps).
    One of Topspin’s aritsts, Fanfarlo, did exactly that: for one month, they offered a brand-new album (with bonus tracks) digitally for a dollar. Their fans got really psyched and generated a ton of energy & buzz about the deal, which got new fans interested and gave them an easy, cheap way to get a taste of the music. Later that year, the band released that same album on CD, vinyl, and special edition, and 30% of those who bought the $1 MP3 version bought the album AGAIN in a physical format. So not only did the band make a little cash from their $1 promotion, they identified a core group of fans who really loved them and were willing to spend money. More details on this campaign here: http://www.topspinmedia.com/2009/09/the-fanfarlo-four-step/
    Long story short — offering an album for $1 can work, if you do it right. It’s not a magic bullet, but it can be a great weapon in your arsenal.

  12. One follow-up note: $1 albums will not “solve” piracy. It’s like the “war on drugs”: people who want free music will find a way to get it, and neither lawsuits nor low prices will stop them. The real concern should be how artists can grow a loyal fan-base and offer them products that they’re willing to pay for. Write the freeloaders off as a marketing expense, cuz they’re not going away.

  13. 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?

  14. How about the Fan has to buy the bands barcoded CD/ticket download to get into the gig ( $15.00 admission plus $3.98 10 song download = $18.98). The revenues from the Download/ticket sales are split between the promoter and the band.

  15. Why not let drop the universal price model and let the “free market” work its magic? If a young artist can make a album on a laptop for less then $500 and sell it for $1 more power to em, but if the big pop star wants a $5,000 a day makeup artist and a multi-million dollar add campaign she will have to sell her album for more than $1. Music consumers will pay for the music they love but the price should reflect something more than the whims of label executives(recording, printing, marketing, ect).

  16. Yeah I totally agree with this. The real key with the Internet is that anything is possible now. There is no “one magic biz model” that is going to work for everyone.
    $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.
    These one-size-fits-all proclamations about how things should be are just silly.

  17. If you do a bit of research on behavioral economics and how people make decisions, you find that there’s a huge psychological difference between free and something costing a penny.
    I don’t think making things cheaper is the answer.
    Making things more expensive and feature rich, on the other hand… Now that has potential. Why? When you pay more for something, you expect it to be good. And it ends up being good because of your expectations. Again, behavioral economics at work. Anyone selling something online or in person owes it to themselves to read up on this stuff.

  18. Since people seem to think that Rob Dickins has only recently left Warner, some facts might help.
    He ran the UK Warner label all through the 80s and 90s. (People like Madonna and Prince owe their phenomenal UK popularity due to him.) He left in the late 90s to set up his own label and then killed that when he realised the old business model wasn’t going to work in the new age. These days he devotes his time to a London children’s charity.

  19. @Corey Crossfield: “Either way the future of music is free. I think the idea of charging for something people can otherwise get for free is antiquated.”
    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. But if someone is making music I really like, I believe it’s worth paying for. It’s my choice to support the artist in this case. It’s your choice to abandon that support. Just so we’re clear. It’s easy to “blame” the technology (everything’s right there, for free!) but no one’s forcing anyone to do anything. 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 this, but the sooner the discussion can lose that “hey, get with the 21st-century program” edge, the better.
    As for antiquated, if you want to know what’s really antiquated, it’s the idea that artists must rely on patrons for support. They used to do that back in the 1700s. Rather old-fashioned.

  20. Mr Dickins’ model of a $1 CD would be very good for my budget. I’d probably be less reluctant in buying an album because I’d accordingly lower the standards of my inner A&R type of filter. Mr Dickins suggested measure would help sellers of new physical music releases compete with those of used physical music releases and regain the labels some market share. And it would also be a worthy try at getting back market share for physical media from iTunes and amazon – unless they drop their prices accordingly as well. Mr Dickins has clearly noticed that the real competition for the labels these days are computer companies such as Apple with whom they once had bonded against the pirates.

  21. They should be free or using the Radiohead model let fans determine the value. Artists should sell the experience of their presence to fans not piece by piece.

  22. You get it wrong. Sponsorships mean artist is at risk of losing independence. Elsewhere which is where exactly?? Tours are expensive too. Many people do not understand that paying for a music is a mark of respect given by a fan. You may not pay for a product, yet you pay for an effort and the time to make a product (song/album, etc.). If it takes, say 3 days for an artist to make a good song, then it is the time during which an artist must eat, drink, etc. Please keep that in mind.

  23. Well, it’s essentially impossible to produce for free. Whether it’s equipment, paying sidemen, the engineer, or even bandwidth, there’s a cost to producing the music. Not to mention possible royalties issues. Try to produce music for free – I guarantee you’ll have a pretty difficult time.

  24. In general, I agree that sales figures would rise – if singles were 25c and albums $1, it would be quick, cheap, and convenient for me to buy 10 albums a week, and try some ‘risky’ new bands that I’ve not heard before without being too disappointed. I believe it would decrease use of P2P sites too – for $1 it’s not worth risking the infected / incomplete / poor quality files on those kinds of sites. I read about someone in the majors having the same viewpoint in a recent book – maybe it was Dickens – and it certainly opened my mind to the possibility.
    Not saying it will work for everyone or it will solve problems or raise major label profits, but certainly something that would open up my purchasing habits to include more digital albums (I’m a vinyl + CD junkie at heart.)
    Lee Jarvis.

  25. The only people who care about free are people who either don’t or feel like they don’t have extra money to spend how they would like. People who have lots of extra money or feel they do, spend that money on what they’d like, knowing they’ll have more to spend in the future. Example: The times in my life while I was only performing in hallways of the subway system, I didn’t make a lot and therefore spent very little on all things in my life. I survived. When I had a job that payed well (or somewhat well) I spent money on things I didn’t need simply because I could!
    Being a musician myself, I believe that paying something is better than paying nothing. If prices were low enough people would feel like it was worth paying something whether it was due to finding value in the music of some kind or to respect the artist and help them out. The problem is that if you make ANYTHING free that people want, most people (because most don’t make a lot for a living) will take it for free. It doesn’t matter if it’s music or shoes or video games. I do believe though, like myself, that if the standard price for a song is lowered more closely to the standard of being free, people won’t mind paying something and at least some money can go back into the pockets of artists. Something is better than nothing. Something would be nice.
    Talking about the costs of making music… It’s true that one cannot record quality music for free. I recorded most of my newest album Wabi~Sabi myself, but I still had to pay a drummer to record his drums per track, someone to master each track, to help mix, to purchase the instruments to play with, the equipment to record with… That’s not including cost of printing up CDs for promotion/marketing, cards/flyers/posters for marketing, etc. We live in the day and age of the independent musician and these are our costs to name a few! So yes, something back would be nice because without our hard work, talent, and investment there would be no music TO download for free!
    ~ Chancius

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