Ever the player ready to take one for the team, Topspin's high profile CEO Ian Rogers stuck his neck our to answer, and even sometimes agree with, the critics.
The fact of the matter is, we *are* trying to build a business. Our plan is to be around a long time, to build a working business that provides value to artists and builds value in exchange. We definitely aren't trying to sell $1.00 for $0.75 and make it up in volume like many Internet (and specifically music Internet) companies before us. Our hope is that artists will be able to appreciate this, what we provide will be of real value, and folks will be happy to pay something fair for it.
We aren't public about our pricing yet because to be honest we don't know what our pricing will be long-term.
As far as our pricing right now, we've been taking a rev share of 20% of retail which decreases as volume increases. There are pass-through costs which we don't mark up at all (in the spirit of full transparency). Please feel free to talk to the managers we've worked with and see how they feel about the value we offer in return for this. Remember, this is a % OF RETAIL which is much less than what iTunes takes (and your distributor fee is a % beyond this), and I don't think there's any question our marketing tools are far and above any "marketing" that iTunes offers the average artist. Also, this is only on transactions which run through Topspin, and I also don't think there's any question a lot of the marketing efforts done with Topspin software benefit sales on iTunes, at physical retail, etc, sales for which we receive 0%. But that's ok with us. That all comes out in the wash.
For the most part the managers we work with seem extremely excited to build out this part of their business, the part where they have a direct and meaningful connection to their fan base, are happy with the tools, and find our fees to be very fair. We're only making money when they make money, and if you consider direct-to-fan as a % of overall gross, and we are taking 20% or less than that, we are priced very competitively relative to other solutions out there. I think there's recognition that companies who don't charge enough won't be around in five years and professionals generally aren't interested in building a strategic part of their business on companies which might evaporate next year.
You refer to an issue with physical retail and accounting for cost of goods, which is an important point. We're working on this, and our partnership with Kufala is a direct attempt to address this pricing problem. We have a number of ideas on how to mitigate the "double dip" problem of fulfillment. We'll get there. This sort of trickiness is exactly why we aren't trying to go big yet, we're trying to start small, work out the intricacies, and come to market with something that's actually practical for many many artists.
Fwiw, we're Tunecore fans, too, and refer artists to them all the time. Peter Wells is on my panel Tuesday morning in NYC (along with Bruce from Hypebot): http://newmusicseminar.biz/players.php
I hope this is helpful. Thanks for the comments and interest, even if they're skeptical. 😉
ian
