November 24, 2008 Considering Different Price Points for Your Music
I’ve read a swarm of arguments on the internet about why all music should be totally free. There have been an equal number of counter-arguments about why music needs a price tag.
What I haven’t seen is much discussion about how musicians can keep different products at different price points. It seems simple enough, but no one seems to talk about it.
Surely, you’ve all know about Radiohead’s In Rainbows release and how Trent Reznor of Nine Inch Nails has been hailed as a new music business mover.
Unfortunately, the hype around these artists has often been oversimplified because of the fact that they broke new ground by being some of the first major artists to offer their music for free. What is often ignored (and I believe vastly more important) is that they didn’t just offer their music for free. No, they created entire product lines around their album releases. Different price points for different products for fans willing to pay different amounts.
Radiohead started with a pay-what-you-want model for their last album, In Rainbows. At the same time, for all the people who absolutely live and breathe Radiohead, they offered a pre-order of the boxed set for $80. Several months later they then had a typical physical release putting the CD in stores. It still sold better than any of their previous albums.
Nine Inch Nails recently offered their Ghosts I-IV album through their website. I’ll just save you some time and show you the choices you have when you want to get your hands on this album:
(click image to enlarge)
This kind of model is something that every single musician and band out there should be doing. Of course, you shouldn’t expect to see Radiohead and Nine Inch Nails type numbers just because you’re smart enough to follow their lead. But what you are doing is catering to the different segments of your audience, and that will “optimize” your album sales.
It’s not about suddenly releasing all of your songs for free. Pricing all of your songs for free neglects the segment of your fans that are FANatics and are willing to buy the super-deluxe-shirt-lunchbox-toothbrush package if you offered one. I am surely not the only Boards of Canada fan that desperately wants the Boards of Canada kaleidoscope. (See some more examples of unique merch here and here)
On the other hand, pricing all of your songs at $1 neglects the part of your potential audience who aren’t willing to open their wallets just to discover new music. If you aren’t offering anything for free, you’ve closed yourself off to discovery and going viral.
Where musicians often seem to miss the boat is that they often don’t admit that their followers aren’t all equally devoted. It’d be great if every fan was equally passionate about everything you do, but the reality of it is that some will be casual fans, some will be fanatics, and most will be somewhere inbetween.
You need to have a product available for each one of these groups.
The best way to do this is to really cater to your audience. Find out what they want, because I guarantee you it isn’t just free albums.
Consider making your next album release a ‘product line’ of sorts by offering different variants of it at different price points. This is somewhere where you can get REALLY creative, so it should be rather fun and exciting to start thinking about. You don’t need to be gimmicky about it, but like I said, cater to what each segment of your audience would be happy and willing to purchase.
Essentially, you are breaking down the barriers to gaining new fans while also monetizing those that are more serious about your music.
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Andrew Goodrich is currently studying business and music industry at Loyola University New Orleans. He’s an aspiring music business entrepreneur, casual musician and photographer, and an avid supporter of artists.
He has interned at Alan Ett Creative Group and 20th Century Fox’s Newman Scoring Stage and Post Production Department. In the future, he hopes to find himself where film and music meet.
He currently resides under the roof of Artists House Music as a video editor and regular contributor to the Artists House Music blog. Artists House Music is a free educational resource for musicians and music entrepreneurs.
Reader Comments (2)
We're just starting to get far enough into this whole "Internet music" game that we can start to see which strategies are working and which aren't. The tiered product approach is definitely one that seems to work.
Something I had given thought to is the "webcartoonist" approach that has worked extremely well for artists like Howard Tayler. He basically posts his daily comics for free, and releases a book every once in a while. He also has a variety of merch available through his web site. The musical analogy would be to release songs for free (with an RSS feed, of course), and every 10-12 songs, release a nice, polished and mastered CD. Howard also includes bonus stories in his books that don't appear on the web. The musician could do the same, if they so chose.
The point is, there are still several approaches to try. This is still a young game, after all.
Great post. It's a numbers game. Bring fans into the funnel and the distribution of price point purchases will follow a general pattern (more at lower price points, less at higher price points)
One way to implement this is through a membership site. I've created a bronze level (free), silver ($19/month) and other higher levels of access. Higher levels usually mean more interactivity with the band, more immediacy (fresh content), and so on.
Plus you don't want to rely on 3rd party sites to manage everything about your band (these sites come and go over time), you need your own website and community that you control.