January 19, 2010 The Perceived Value of Music
“Sh*t.”
That’s what major record label executives are saying right now about the music industry.
The music industry has decreased in value as the death of record retailers has increased and music piracy is on the rise.
The perceived value of music has gone down…significantly.
Hardly anyone perceives one of the cheapest forms of entertainment to be $20.00; some perceive it as $10.00, and too many perceive music as absolutely free.
It’s only getting worse.
Consumers are getting to the point that if they can’t get an artist’s music for free, they will not consume it at all, or just wait until they can acquire the music for free.
Music has become a common resource; it is an intangible good that cannot be prevented from other people from consuming even if they pay for it, and is unlimited in amount. The Internet is the one you really want to thank for this.
Most people do not realize that the free consumption of music is actually limiting the amount of music for certain artists, but the Internet is giving rise to more and more artists – INCREASED COMPETITION WHICH MEANS MORE MUSIC FOR LOWER PRICES IN ORDER TO COMPETE WITH MORE EXPENSIVE, HIGHER QUALITY MUSIC.
The profit made off of an album is meant to be invested into the next album to make a better, higher quality album next time. Artists and labels need a profit to constantly keep making new products and innovating in order to survive in the business.
So what do we do if people aren’t paying enough money for music, and artists don’t have enough money to reinvest in another album?
Artists and labels have to lower the costs and expenses of making an album and somehow take advantage of the “free” mindset by music consumers.
My suggestion is that artists and labels have to also provide incentives to buy albums. Give out a free song, and then reel in buyers to buy the rest of the album (if it’s good).
Music is only going get cheaper and cheaper until technology finds a new form in which music can be transported. For now, we have to deal with what we got, and market to the right people who are willing and able to buy music.
It’s impossible, at this point, to turn music back into a private, rival good (or into a tangible format like a CD). Especially, since the RIAA is hardly doing any cracking down on the ISPs.
If you Google an artist, most likely you will see the artist’s name and the word “torrent” next to it in the suggested list. Good job RIAA.
The economy’s bad, college kids have too much debt, kids are finding new ways to get free music on the Internet, and old people are hardly buying new music and just sticking to what they know. We won’t be able to change these factors for a long time, so artists and labels must do what every other business is doing –
LOWER YOUR PRICES ACCORDING TO SUPPLY AND DEMAND OR GIVE AWAY YOUR PRODUCT AND TAKE A NET LOSS UNTIL PEOPLE PERCEIVE IT AS A GOOD THEY ARE WILLING AND ABLE TO BUY.
If you are an unknown artist, the demand for your music will be low, therefore your price must be low or, better yet, free. When I mean low demand, I mean you have less than 300 fans on any of your social network pages and the max amount of people you’ve played a show for is about 50 to 60 something people.
Independent artists must realize that you have to work your way up. As you gain a higher demand for your music, you can raise the price, and make a higher profit. For now, give away your music to gain more fans and have your music spread. Even if you’ve spent hundreds on recording software, equipment, and instruments, you just have to be patient and ride out this bad wave.
Also, ask yourself some of these questions when taking the business approach towards making an album:
- What group does your music appeal to most?
- Is this group your target market?
- What does your target market like to buy and how can you utilize that in order to make your target market buy your music?
- Can you associate your music with another good in order to increase sales to your target market?
- What do you need to produce and invest into in order to make a successful profit while keeping costs and expenses low?
- Is it better for someone to have your music for free than to not have it at all if they’re not willing to pay for it?
Personally, I’m not just an artist explaining all of this on a soapbox; I’m also a music downloader trying to warn the industry, so take heed, and good luck.
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