Aug 052009
A study last year conducted by members of PRS for Music, a nonprofit royalty collection agency, found that of the 13 million songs for sale online last year, 10 million never got a single buyer and 80 percent of all revenue came from about 52,000 songs. That’s less than one percent of the songs.
I wonder what the stats are for Flash games, for indie games, for ads on streaming videos or on YouTube?
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New Pricing Plan Soon To Be At Play For Online Music
People will buy lesser-known digital tracks, but they’ll only pay what THEY think they’re worth, not what WE think they’re worth. The dynamic pricing plan described in the article above links prices with demand in a very direct fashion. Not that it’s a magic bullet, but it looks like a promising approach for music. For games? I don’t know if anybody’s even contemplating it.
I’d say the most overlooked element is actually the element of risk. People default to being rather risk-averse, and a purchase is a risk. How much marketing really goes into making people feel secure in their decision to buy?
This is (part of) why word-of-mouth is so much more influencing than advertising or other forms of promotion. One trusted friend assuring you that something is good can eliminate insecurity in a way that advertisement, with its necessarily biased if not at times adversarial position relative to the consumer, is not effective at doing.
(Also, remember that the sensation of risk is very different than the objective risk; you can indeed feel insecure over a $2.00 purchase just before going out and unhesitantly blowing $10.00 on fast food.)
I’ve seen several interesting articles challenging the whole “Long Tail” thing. The Register, as usual, was pretty colorful:
The Long Tail Debunked
Can 1,000 fans replace the music business?
The power curve continues its reign. It would be bizarre to expect anything different for games.
Does “free” actually change behavior?
“Does “free” actually change behavior?”
Not if it’s not worth a wood’n nickle, it don’t.
Free is just a price point. It’s not even the lowest price point. A common value add is “Download our X and get entered into a drawing for Y”, thus a little better than free.
There is actually a huge psychological gap between free and not free. Studies show than when subjects are offered something for free or a much better deal for a marginal cost, they will overwhelmingly choose the freebie. Humans seem to wired for raiding over trading. If you’re selling something and your competitor is giving it away, the only way you’re going to keep up is to be not just better, but orders of magnitude better… or to give yours away as well.
“Better” is subjective, of course. You can influence the perceived value of your product with marketing and buzz. Whether you can influence it enough to jump the penny gap is another matter.
The flip side is that you can use the allure of “free” to get people to perform all sorts of useful tasks that you would otherwise have to pay for — beta test, anyone? Can that translate into a sustainable revenue stream? Don’t ask me. I’m just a player.
The problem is that every single one of those songs is for sale at the same price, when they aren’t worth the same amount. If a song hasn’t sold anything start dropping the price a dime a month and promoting some of the better songs each month. Stop when the price gets down to a dime. I bet that if they did that then those 10 million songs that aren’t selling at full price would actually earn more money than the 1% popular songs.
No they won’t, Jimmy. Time and again, the difference is quality as perceived through the lens of ‘what’s hot’ and ‘what’s not’ and if you’re not, you can’t give it away. When selling crap, you have to label the clean end of the turd so they know where to pick it up.
The long tail was always a myth. Context IS friction. The question is not will the Web 2.0 bubble pop. It is what will be standing afterwards.
Streaming digital songs will be. Ad based distribution that requires free content: nope. That is going south. This is not the Big Bads at the major labels saying it. The indies, the in-betweens etc. are saying it. The content donation foodchain to the computer industry is grinding to a halt except for the pre-minor leagues where as the research shows, not enough money is being made to keep them out of the ‘hobbyist’ category.
Games that cost a lot of money to produce will now cost more. The cost of producing music in the minor leagues has come down. In the major leagues, it is about the same. IOW, most of the costs are stable. It is a matter of remonetizing.
Costs for game production are going up, yes?
I think isolating online sales is going to be a little misleading. If people really like a song, they might well buy a CD and then rip it – it’s often higher quality, you get concrete ownership of the media and it’s more flexible.
What I’d expect people would buy online are single well-known songs they want at extremely cheap prices, and experimental buys on the same basis. I’d like to know the correlation between the success of the 85,000 online songs and their success in CD sales.
Jimmy’s idea isn’t far off from the dynamic pricing model described in the link at the top of the thread, and it appears to be working pretty well. And Moose is right, too… what moves at a $0.35 price are older tunes that people want to pad out their collections, plus lesser-known stuff that people would be reluctant to buy at a dollar or more.
Today’s hobbyist is tomorrow’s wunderkind.
Very seldom. It really doesn’t work that way. I wish it did. As T-Bone Burnett put it on Jon Taplin’s blog, artists don’t typically have access to capital and they need it to record competitively.
Some claim CDs are dead and that streaming is the brave new world. Some don’t.
I made my very first public upload to YouTube last night, a music video featuring my wife’s SL character. This morning, with modest promoting, I’ve got 71 views. With a bit of luck, that translates into better attendance at her virtual concerts and maybe a buck or two more in tips.
I’m not going to pretend there’s any larger significance. We’re not small fish in a big pond; we’re plankton in an ocean. But if she feels like a star and I feel like Spielberg, and some small fraction of a small audience is moved by our efforts… well, getting paid is really, really nice, but it’s not the only measure of value by any means.
Artists need to eat — it’s really cool that some fraction can do that from art alone, without needing a day job. Beyond that? Prognosticating the future of the industry is fun, but irrelevant. Artists create. Cashing in is beside the point. “Competitive” is beside the point. The art is the point.
Yukon: where is the YouTube vid? I’d like to watch it.
Best of luck to the wife in her gigging adventures.
We’re not fish. We just smell funny.
Annan Dreamscape: Cry Me a River
Caveats: Second Life’s lip sync feature is still in beta, so it’s impossible to get a perfect sync. My graphics card is old and tired. I was using the MicroSoft video editor, and the nicest thing I can say about it is… it’s free (once upon a time, I trained on an Avid system, and now I’m irrevocably spoiled).
Caveats aside, I’m rather pleased with the results, and Annan was thrilled.
Nice camera work. Nice voice. Fabulous hoot… graphics. Who did the guitar work?
One of my favorite songs.
So she is appearing Second Life? Where?
Silly me, should have posted a link to Annan’s Blog with the video. Her calendar is under Links.
I’d love to take credit for the fretwork, but it’s a commercial backing track, either from the ’91 remaster of Julie London’s version or a faithful replica.
[…] best-selling titles, and worse, that independent artists have actually lost share to major labels. And via Raph, another recent research study with similar findings: of the 13m songs for sale online last year, […]
Dropping the price of unliked content isn’t necessarily going to gain more sales.
Some fraction of unliked content isn’t bad content, it is niche content. You need to *raise* the price of niche content to make it worthwhile to produce. Setting price by popularity falls into the foolish trap that something liked by 1/10th the audience is worth 1/10th the amount – a sort of double-penalty since you are thus implying 1/100th the revenue!
The key is to realize not everyone in the flash/indie gamespace is interested in selling crap. That component just happens to be the part that gets the biggest buzz and iPhone news because, being crap, it can be shoveled out to a larger audience. There is a huge diversity in human taste which cannot be addressed by either large budget games or quickly produced shlock. What we should do is try and educate people that when they have a niche taste, they should recognize they have to pay *more* to satisfy that taste than for the latest shiny FPS.
Jeff Vogel said this all much better than I.