Digital music payment models
(Credit:
Business Week Online)
A panel named Reinventing Payment Models for Digital Music sounds pretty boring, doesn't it? In fact, the SXSW panel was infinitely more entertaining than the Ultimate Music Recommendation Smackdown. Shocking, I know. But the entire audience was cracking up for the majority of the session. It's rather hard to get the comedic interactions of the panelists across in this medium, so you'll just have to bear with my relative lack of humor as I try to relay the meat of the information.
The gist is that the majority of artists make very little from music downloads because the contracts they're under are outdated and based on physical media and the stipulations that go along with that (such as container fees, pressing, and so on). Changing the way artists are compensated is an understandable concern, seeing as how the future of music likely rests in the digital landscape. However, it's also important that an appropriate pricing scheme is set for the consumer. For one, when it comes to music downloads, the consumer is both the distributor (which pays for the required broadband connection) and the manufacturer (if burning discs), so we should not be charged the same as we would for physical media. Plus, if the consumer thinks the pricing is unfair, we're more likely to not purchase the music...and might even feel compelled to steal it.
One thing I'd like to bring up here that was mentioned several times throughout the panel is the idea that buying music is now seen as "unhip." I don't really agree with that statement. Personally, I think stealing music is unhip. I for one don't want to be thought of as a thief. Further, it seems to me that buying vinyl is considered pretty hip, though I may be biased due to the prevalence of DJs in the San Francisco Bay Area. But what do the rest of you think? Is buying music unhip?
For more than five years, Jasmine France has covered a variety of tech products for CNET--from scanners to keyboards to GPS devices--but she's happiest where she is now: sitting atop a pile of MP3 players, "testing" every music service known to man, and jamming a variety of earbuds in every shape and color into her absurdly small ears. E-mail Jasmine. 
And once you are a paying customer, you get discounts for concert tickets. And later when they have boxed sets or whatever, you can get another discount. I mean, it is all about creating communities.
- Publishers have no reflections in mirrors
- by j1webb March 24, 2007 7:03 PM PDT
- It has long been known by anyone in the music business that publishers are blood sucking vampires and will steal artists blind. The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There's also a negative side.
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(8 Comments)Until music downloading came along, artists had no way of auditing what was sold nor what the publishing and distributions cost overhead was. So the music publishers could pad the overhead with no fear of being discovered.
Since the publishers now demand a good audit trail from the download sites, that means artists can also get the same information and that is what is really crushing the publishers profits. The skim is being elimiated and so there goes all of the money the music publishers felt rightfully belonged to them.
The RIAA has no interest in making sure the artists get their fair share, they know they now have to make their money in a more honest way. But they still want to charge a percentage for pressing the CD, packaging the CD, warehousing the CD and distributing the CD. Even though they don't incur these costs on online sales. But they have signed contracts that the artists can't get out of.
The publishers used to be considered just the pimps, but now they are also the prostitutes, They have it, they sell it, and they still have it.
I think Starbucks music publishing model (and others like it) will finally break the hold the big 5 publishers have on the music industry and the artists. Paul McCartney just signed a contract with Starbucks and you can bet he is not giving away the same huge percentage the other artists are locked into. Paul has long been refusing to release a great deal of his music for on-line sales because he saw how bad the ripoff was and he was financially well off enough to not have to make a deal with them. Slowly, other artists will do the same thing with their new music and eventually the tipping point will be reached and artists will be able to get their fair share of the pie and hopefully the publishers will wind up with a stake through their hearts.