The recent statement from EMI honcho Alain Levy that he thought the iTunes Music Store would introduce tiered pricing in the coming year has produced some comments from people that might wish to stick to their chosen professions. One of these would be Joel Spolsky, long time Internet wonk and CEO of Fog Creek software. I’ve been reading Joel On Software for several years now and used some of the insight in project management during my reign at ProSoundWeb/Universal Concept. Joel knows software, but Joel doesn’t know the music biz. Or about the concept of fair use with regards to US copyright. Sorry babe, but you don’t and can’t control how others refer, link to or quote your work. You can’t impose your narrow rules on others fair use, that ain’t how it works, babe.
Earlier today Spolsky came up with Yet Another Music Industry Conspiracy Against the Artist or YAMICATA as I’ll term it. Anyone that’s read anything here knows that I’ve got no love loss for the policies of the labels with regards to music over the Internet. There are some pretty big gaps in logic on this one and I just had to comment on it. Basically, Spolsky says that the labels are pushing iTMS to use tiered pricing as a leverage against artists and also use the pricing to somehow make the users feel that a tune for two and half bucks is better than a tune that costs a buck no matter how good the tune. Oh shit, I’ve just violated one of Spolsky’s rules which says I can’t paraphrase him. Bummer. This is so wacky, I will quote it just so I’m clear.
“Now, the reason the music recording industry wants different prices has nothing to do with making a premium on the best songs. What they really want is a system they can manipulate to send signals about what songs are worth, and thus what songs you should buy. I assure you that when really bad songs come out, as long as they’re new and the recording industry wants to promote those songs, they’ll charge the full $2.49 or whatever it is to send a fake signal that the songs are better than they really are.” So says Spolsky.
You gotta be shittin’ me. No, really. Prior to that he gives an analogy to movie theaters in that they don’t raise the prices for popular movies or lower the prices of the stinker. Huh? Movies in theaters aren’t CDs. Damn it, I did it again, I paraphrased him. Hope he ain’t mad. Hold on, it gets wackier…
“And now when a musician gets uppity, all the recording industry has to do is threaten to release their next single straight into the $0.99 category, which will kill it dead no matter how good it is. ” So sayeth Spolsky.
If this were a Python sketch, it would be funny, but I think the guy is serious. Now let’s look and see how the music biz really works. When the Mega Pop Artiste of the Week or MPAOTW label releases that work on a Tuesday it’s usually in coordination with lower prices during the initial promo period. The hell you say Dave, the stuff that’s tracking on the Hot 100 is likely to be discounted? Well, yeah, pretty much the opposite of what Spolsky proposes. He might want to go into a record store, even if it’s in a Best Buy, Target or Wallmart. I don’t know about y’all, but for me and most of my music listening (and music making) buddies we buy music based on what it sounds like and how much we enjoy the tune. Actually, that’s not entirely true, we get metric buttloads of legit music for free in the form of promos. The music we do buy is not because it’s more or less expensive, it’s because we like it. If it’s too expensive, people will just get it from a Darknet.
Then why do the labels want tiered pricing? Well, they’ve been screaming since iTMS came out that .99 is too low a price point. That was one of the big sticking points when Jobs initially started the concept of iTMS. To understand why the labels say that, one has to know how records are made in the first place. With ala carte song pricing at a buck, that has to support the rest of the dead wood on that CD. For example, the CD is recorded, mixed and produced pretty much all at the same time and paid for with a large hunk of money. Same with promo, the gack, hookers and payola come from one big pot. That’s a big fixed nut to recoup. Let’s say the artist sells 100k records. On that record are a couple of good songs, some mediocre songs and perhaps a few turd logs. If they’re selling CDs at 15 bucks a pop and you’re really only listening to a couple of tracks the bottomline is really gonna take a hit when you can get what you want for a couple of bucks. By increasing the price of each track to two and a half bucks they not only help insure that by buying only a couple of tracks they can support the rest of the record and they make it more likely that you’ll find more value in buying the whole thing rather than just a couple of tracks. The labels want to sell as many of whatever it is they can sell and make the most they can from it. The idea that they’ll charge more for crappy songs and use price reduction to punish artists is so not right it’s not even wrong. Sounds to me like someone is either on the pipe, or has been hit in the head with one.