UK file-sharers will be 'cut off'
Discussion
tinman0 said:
youngsyr said:
As for margins, they are made up of revenue less costs. Costs aren't materially affected by this issue*, leaving only revenue. Revenue is made up of units sold and the price they're sold at. If you sell more units at a lower price, it's possible to maintain or even improve your total revenue and hence your margins.
'*Arguably the only impact on costs by switching to a high volume/low cost virtual distribution model would be to lower them, as there would be fewer middlemen and lower distribution costs with no physical media to transport and sell in physical outlets.
Eh? There are huge costs in making music. Studios don't come free for instance.'*Arguably the only impact on costs by switching to a high volume/low cost virtual distribution model would be to lower them, as there would be fewer middlemen and lower distribution costs with no physical media to transport and sell in physical outlets.
Then you have to market the music as it just doesn't sell itself.
...
The costs of finding, financing and producing the actual music will not be materially different from how they are now, it's just that a lot of middlemen, costs of producing, shipping, stocking and selling physical copies of the media will be cut out.
So, if anything, costs should drop slightly compared to the current model. I'm not saying that there aren't significant costs involved, just that they're not relevant to the discussion as they're incurred whichever pricing model the industry follows.
tinman0 said:
Then you have to market the music as it just doesn't sell itself.
Yes it does. Good music will mostly make it out there without much marketing (although the more the better of course to an extent). In this day and age of music "sharing", youtube, myspace, samples on band websites, word of mouth (which has always been around) etc. the music gets itself out there. Granted, bands need to get their music known about but these days they don't necessarily need record labels to do it. Many can do their own marketing (mainly via the web).I would say the VAST majority of music I have didn't have much marketing involved (never seen much of it advertised outside label and band websites)
Of course, chart crap needs marketing but I don't give a **** about the latest over produced R&B/pop/boyband/girlband dirge.
Edited by Dracoro on Monday 19th April 11:43
youngsyr said:
tinman0 said:
youngsyr said:
As for margins, they are made up of revenue less costs. Costs aren't materially affected by this issue*, leaving only revenue. Revenue is made up of units sold and the price they're sold at. If you sell more units at a lower price, it's possible to maintain or even improve your total revenue and hence your margins.
'*Arguably the only impact on costs by switching to a high volume/low cost virtual distribution model would be to lower them, as there would be fewer middlemen and lower distribution costs with no physical media to transport and sell in physical outlets.
Eh? There are huge costs in making music. Studios don't come free for instance.'*Arguably the only impact on costs by switching to a high volume/low cost virtual distribution model would be to lower them, as there would be fewer middlemen and lower distribution costs with no physical media to transport and sell in physical outlets.
Then you have to market the music as it just doesn't sell itself.
...
The costs of finding, financing and producing the actual music will not be materially different from how they are now, it's just that a lot of middlemen, costs of producing, shipping, stocking and selling physical copies of the media will be cut out.
So, if anything, costs should drop slightly compared to the current model. I'm not saying that there aren't significant costs involved, just that they're not relevant to the discussion as they're incurred whichever pricing model the industry follows.
Your distribution model is increasingly online, but there is still the middleman in the likes of the eretailer, eg iTunes and Amazon. People aren't visiting your web site, they are visiting the retailer. That retailer wants a cut of the action as they own the path to the consumer. They've invested in brand, websites, applications (in the likes of iTunes), the backend ordering and distribution.
So they want a cut. Your middleman isn't going to disappear.
They also bring the ability for your customers to find your new talent as well. So someone shopping for artist X will be introduced to artist Y for instance. So in many respects, they are beneficial to the artist and record companies getting more sales.
Where your argument is further flawed is the cost of music today.
Surprisingly it has come down. Compare Lady Gaga and Fame Monster for instance. £8.99 from HMV for a delivered CD or £8.99 from iTunes. The cd always did cost nothing, and considering that cd's 5 years ago were upwards of £13-14?? The real cost of music has come down.
Someone said earlier in this thread about cassettes being £6.99 and then CDs being introduced and the cost going up to £11.99. I remember those days - late 80s in fact. (Malcolm Mclaren Waltz Darling was my first CD lol).
£11.99 over 20 years ago to £8.99 today is a pretty good drop in the price of music.
And that's not comparing some of the back catalogues either. Lighthouse Family for instance with HMV selling an album for £4.99 with free delivery.
So your whole argument of cheap music is flawed. It already is cheap. It's just that people are being tight.
As for your idea that record companies could be employed to promote music - what new band has £50-100k to pay for a company to market their first album?
So the industry works the other way round, the record company invests in a band and does the promotion work itself. And of course they'll want a cut as they are the ones taking a risk!
Dracoro said:
tinman0 said:
Then you have to market the music as it just doesn't sell itself.
Yes it does. Good music will mostly make it out there without much marketing (although the more the better of course to an extent). In this day and age of music "sharing", youtube, myspace, samples on band websites, word of mouth (which has always been around) etc. the music gets itself out there. Granted, bands need to get their music known about but these days they don't necessarily need record labels to do it. Many can do their own marketing (mainly via the web).I would say the VAST majority of music I have didn't have much marketing involved (never seen much of it advertised outside label and band websites)
Of course, chart crap needs marketing but I don't give a **** about the latest over produced R&B/pop/boyband/girlband dirge.
Edited by Dracoro on Monday 19th April 11:43
What we're currently seeing is music producers trying to legislate protection for their investment into existence and in my opinion once you've reached that position you're destined to fail as people will risk falling foul of the legislation if the reward is great enough, and clearly it is or the producers wouldn't be trying to protect it!
As far as I can see, the only way to protect their return on their investment is to take away the reward for those who currently break the rules and the only way to do that is to make downloading offical media so cheap and straight-forward that it's non-sensical to seek to obtain ripped off copies.
Music sales will never be as profitable as it used to be. That's just something they'll have to deal with.
A hypothetical.
If you saw a VHS shop owner complaining now about his low profits and no one buying his s
t, would you feel bad? No. He didn't move with the times. He should have started selling DVD players and then Bluray players.
But he didn't. He stuck with the archaic VHS system and now he's paying the price.
Is it the DVD's fault? No.
A hypothetical.
If you saw a VHS shop owner complaining now about his low profits and no one buying his s
t, would you feel bad? No. He didn't move with the times. He should have started selling DVD players and then Bluray players. But he didn't. He stuck with the archaic VHS system and now he's paying the price.
Is it the DVD's fault? No.
tinman0 said:
youngsyr said:
tinman0 said:
youngsyr said:
As for margins, they are made up of revenue less costs. Costs aren't materially affected by this issue*, leaving only revenue. Revenue is made up of units sold and the price they're sold at. If you sell more units at a lower price, it's possible to maintain or even improve your total revenue and hence your margins.
'*Arguably the only impact on costs by switching to a high volume/low cost virtual distribution model would be to lower them, as there would be fewer middlemen and lower distribution costs with no physical media to transport and sell in physical outlets.
Eh? There are huge costs in making music. Studios don't come free for instance.'*Arguably the only impact on costs by switching to a high volume/low cost virtual distribution model would be to lower them, as there would be fewer middlemen and lower distribution costs with no physical media to transport and sell in physical outlets.
Then you have to market the music as it just doesn't sell itself.
...
The costs of finding, financing and producing the actual music will not be materially different from how they are now, it's just that a lot of middlemen, costs of producing, shipping, stocking and selling physical copies of the media will be cut out.
So, if anything, costs should drop slightly compared to the current model. I'm not saying that there aren't significant costs involved, just that they're not relevant to the discussion as they're incurred whichever pricing model the industry follows.
Your distribution model is increasingly online, but there is still the middleman in the likes of the eretailer, eg iTunes and Amazon. People aren't visiting your web site, they are visiting the retailer. That retailer wants a cut of the action as they own the path to the consumer. They've invested in brand, websites, applications (in the likes of iTunes), the backend ordering and distribution.
So they want a cut. Your middleman isn't going to disappear.
They also bring the ability for your customers to find your new talent as well. So someone shopping for artist X will be introduced to artist Y for instance. So in many respects, they are beneficial to the artist and record companies getting more sales.
Where your argument is further flawed is the cost of music today.
Surprisingly it has come down. Compare Lady Gaga and Fame Monster for instance. £8.99 from HMV for a delivered CD or £8.99 from iTunes. The cd always did cost nothing, and considering that cd's 5 years ago were upwards of £13-14?? The real cost of music has come down.
Someone said earlier in this thread about cassettes being £6.99 and then CDs being introduced and the cost going up to £11.99. I remember those days - late 80s in fact. (Malcolm Mclaren Waltz Darling was my first CD lol).
£11.99 over 20 years ago to £8.99 today is a pretty good drop in the price of music.
And that's not comparing some of the back catalogues either. Lighthouse Family for instance with HMV selling an album for £4.99 with free delivery.
So your whole argument of cheap music is flawed. It already is cheap. It's just that people are being tight.
As for your idea that record companies could be employed to promote music - what new band has £50-100k to pay for a company to market their first album?
So the industry works the other way round, the record company invests in a band and does the promotion work itself. And of course they'll want a cut as they are the ones taking a risk!
The rationale behind the theory of moving from charging £8.99 for an album to say £2 for an album is that you'll gain a small amount of revenue from all those who are currently file sharing for free whilst losing only a little from those who are paying the full price for it.
Clearly a significant people aren't willing to pay £8.99 for the album, that doesn't mean that they won't pay any amount for it. At some point the price will reach a level where they will pay to download it, especially if it means avoiding complicated file-sharing software and the risk of viruses etc.
As for the back catalogue, your "cheap" £4.99 is almost entirely pure profit for the record company, especially for a lot of pop music where people like Simon Cowell have stitched up the actual artists to the point where they're earning pennies from each album sale. I would suggest that they'd make money even selling it at £1 per album and would probably also sell more copies.
Obviously some of those profits will be reinvested in new talent, but I'm sure we can agree that a significant amount isn't.
It wasn't my suggestion that the companies should do the promoting themselves, so I won't address that.
youngsyr said:
tinman0 said:
youngsyr said:
As for margins, they are made up of revenue less costs. Costs aren't materially affected by this issue*, leaving only revenue. Revenue is made up of units sold and the price they're sold at. If you sell more units at a lower price, it's possible to maintain or even improve your total revenue and hence your margins.
'*Arguably the only impact on costs by switching to a high volume/low cost virtual distribution model would be to lower them, as there would be fewer middlemen and lower distribution costs with no physical media to transport and sell in physical outlets.
Eh? There are huge costs in making music. Studios don't come free for instance.'*Arguably the only impact on costs by switching to a high volume/low cost virtual distribution model would be to lower them, as there would be fewer middlemen and lower distribution costs with no physical media to transport and sell in physical outlets.
Then you have to market the music as it just doesn't sell itself.
...
The costs of finding, financing and producing the actual music will not be materially different from how they are now, it's just that a lot of middlemen, costs of producing, shipping, stocking and selling physical copies of the media will be cut out.
So, if anything, costs should drop slightly compared to the current model. I'm not saying that there aren't significant costs involved, just that they're not relevant to the discussion as they're incurred whichever pricing model the industry follows.
http://www.informationisbeautiful.net/2010/how-muc...
Dave
youngsyr said:
Let's ignore costs and just assume that they're the same with both models as I said right from the beginning there won't be a massive difference and concentrate purely on revenue.
The rationale behind the theory of moving from charging £8.99 for an album to say £2 for an album is that you'll gain a small amount of revenue from all those who are currently file sharing for free whilst losing only a little from those who are paying the full price for it.
Clearly a significant people aren't willing to pay £8.99 for the album, that doesn't mean that they won't pay any amount for it. At some point the price will reach a level where they will pay to download it, especially if it means avoiding complicated file-sharing software and the risk of viruses etc.
As for the back catalogue, your "cheap" £4.99 is almost entirely pure profit for the record company, especially for a lot of pop music where people like Simon Cowell have stitched up the actual artists to the point where they're earning pennies from each album sale. I would suggest that they'd make money even selling it at £1 per album and would probably also sell more copies.
Obviously some of those profits will be reinvested in new talent, but I'm sure we can agree that a significant amount isn't.
It wasn't my suggestion that the companies should do the promoting themselves, so I won't address that.
You're losing me on this.The rationale behind the theory of moving from charging £8.99 for an album to say £2 for an album is that you'll gain a small amount of revenue from all those who are currently file sharing for free whilst losing only a little from those who are paying the full price for it.
Clearly a significant people aren't willing to pay £8.99 for the album, that doesn't mean that they won't pay any amount for it. At some point the price will reach a level where they will pay to download it, especially if it means avoiding complicated file-sharing software and the risk of viruses etc.
As for the back catalogue, your "cheap" £4.99 is almost entirely pure profit for the record company, especially for a lot of pop music where people like Simon Cowell have stitched up the actual artists to the point where they're earning pennies from each album sale. I would suggest that they'd make money even selling it at £1 per album and would probably also sell more copies.
Obviously some of those profits will be reinvested in new talent, but I'm sure we can agree that a significant amount isn't.
It wasn't my suggestion that the companies should do the promoting themselves, so I won't address that.
So the people who are willing to pay £8.99 should continue to pay £8.99 and the people who want to pay £2 should just pay £2, and the record company will increase its turnover??
I would say that people are perfectly willing to pay £8.99 for a downloaded album, or even £7.99 which is the usual price. People understand that there is a cost involved and there is a price to pay to listen to it.
The only people who have problems with that are the people who wouldn't pay £2 anyway.
Allofmp3 (love em or hate em) were practically giving music away for free - and people still ripped tracks on torrents, so again, your idea doesn't really hold much water - we've been there, tried that, failed, and got the tshirt.
Sorry, but if you think a record company is going to make money on an album being sold for £1, you are deluded.
Tangent Police said:
If you want to make money, get out there and gig.
The environment has changed and no longer supports that particular animal.
Deal with it.
And how much money does gigging make? How many bands can afford to drop everything to share out £500 a week between them?The environment has changed and no longer supports that particular animal.
Deal with it.
A record company provides the entire 'back office' function for a band, including the risk of investment into them before they begin to see any returns. That is why it's so hard for any band to get their first record deal- because the investments are very, very high risk and the chances of large returns are small. For every big band coming through there are thousands that never take off.
The record companies are really just venture capitalists specialising in ultra-high risk investments. As you'd expect with any high risk investment, the return they want from it has to match that risk.
Forget the medium the music is distributed through- all you're buying at any time is intellectual property. Some people find it acceptable to steal other people's intellectual property, some don't. Ultimately, if enough people steal that property, the record companies will not be able to justify making any investments and therefore the creators of that property, the artists, will not be able to justify continuing to make it for no return.
Eventually the extrapolation is that profit from music will become impossible, as once the music becomes popular enough, people will just steal the IP and no return can be made. Whilst some musicians are altruistic and aren't in it for the money, most of them are in it for a (large in some cases) return. If you want a music scene where artists are only ever in it for the music, fair enough. Just don't expect there to be the quality of music around in the quantities we have now, as most musicians you'll never get to hear about in the first place, assuming they have the time, motivation or funding to do it commercially at all.
10 Pence Short said:
Tangent Police said:
If you want to make money, get out there and gig.
The environment has changed and no longer supports that particular animal.
Deal with it.
And how much money does gigging make? How many bands can afford to drop everything to share out £500 a week between them?The environment has changed and no longer supports that particular animal.
Deal with it.
My particular gripe is that there are starmakers out there who pick people and promote them and the public get fed s
t by this machine. I've done my fair share of sessions and gigs and it's no way to live.
Anything which redresses the balance between Cowell and his promoted lepers and craftsmanship is a good thing.
Tangent Police said:
10 Pence Short said:
Tangent Police said:
If you want to make money, get out there and gig.
The environment has changed and no longer supports that particular animal.
Deal with it.
And how much money does gigging make? How many bands can afford to drop everything to share out £500 a week between them?The environment has changed and no longer supports that particular animal.
Deal with it.
My particular gripe is that there are starmakers out there who pick people and promote them and the public get fed s
t by this machine. I've done my fair share of sessions and gigs and it's no way to live.
Anything which redresses the balance between Cowell and his promoted lepers and craftsmanship is a good thing.
The real criminals are the buying public who consume the garbage, rather than the record companies who supply it. It's like blaming McDonalds for fat people.
10 Pence Short said:
Tangent Police said:
If you want to make money, get out there and gig.
The environment has changed and no longer supports that particular animal.
Deal with it.
And how much money does gigging make? How many bands can afford to drop everything to share out £500 a week between them?The environment has changed and no longer supports that particular animal.
Deal with it.
A record company provides the entire 'back office' function for a band, including the risk of investment into them before they begin to see any returns. That is why it's so hard for any band to get their first record deal- because the investments are very, very high risk and the chances of large returns are small. For every big band coming through there are thousands that never take off.
The record companies are really just venture capitalists specialising in ultra-high risk investments. As you'd expect with any high risk investment, the return they want from it has to match that risk.
Forget the medium the music is distributed through- all you're buying at any time is intellectual property. Some people find it acceptable to steal other people's intellectual property, some don't. Ultimately, if enough people steal that property, the record companies will not be able to justify making any investments and therefore the creators of that property, the artists, will not be able to justify continuing to make it for no return.
Eventually the extrapolation is that profit from music will become impossible, as once the music becomes popular enough, people will just steal the IP and no return can be made. Whilst some musicians are altruistic and aren't in it for the money, most of them are in it for a (large in some cases) return. If you want a music scene where artists are only ever in it for the music, fair enough. Just don't expect there to be the quality of music around in the quantities we have now, as most musicians you'll never get to hear about in the first place, assuming they have the time, motivation or funding to do it commercially at all.
Internet and social network sites are the future for the industry.
Artists will seek to interact directly with fans via the internet, and slowly, the record companies will become obsolete.
'Word of mouth' is now the biggest advert for a band......and you do not need a record company for that. Just several dedicated followers on a network site.
Spiritual_Beggar said:
The industry is changing.
Internet and social network sites are the future for the industry.
Artists will seek to interact directly with fans via the internet, and slowly, the record companies will become obsolete.
'Word of mouth' is now the biggest advert for a band......and you do not need a record company for that. Just several dedicated followers on a network site.
The internet is just an alternative medium for promotion and distribution of music. The job of the record companies is still necessary and the same.Internet and social network sites are the future for the industry.
Artists will seek to interact directly with fans via the internet, and slowly, the record companies will become obsolete.
'Word of mouth' is now the biggest advert for a band......and you do not need a record company for that. Just several dedicated followers on a network site.
Do you expect retailers to negotiate terms with every single individual artist? Notwithstanding artists having to support their own costs, of course. I cannot imagine many young musicians willing to take a punt on hundreds of thousands of pounds in the hope their new album will make them popular enough to make it a career.
Record Companies are necessary evils who deserve their cut in recognition of the work and risk they put in.
10 Pence Short said:
Spiritual_Beggar said:
The industry is changing.
Internet and social network sites are the future for the industry.
Artists will seek to interact directly with fans via the internet, and slowly, the record companies will become obsolete.
'Word of mouth' is now the biggest advert for a band......and you do not need a record company for that. Just several dedicated followers on a network site.
The internet is just an alternative medium for promotion and distribution of music. The job of the record companies is still necessary and the same.Internet and social network sites are the future for the industry.
Artists will seek to interact directly with fans via the internet, and slowly, the record companies will become obsolete.
'Word of mouth' is now the biggest advert for a band......and you do not need a record company for that. Just several dedicated followers on a network site.
Do you expect retailers to negotiate terms with every single individual artist? Notwithstanding artists having to support their own costs, of course. I cannot imagine many young musicians willing to take a punt on hundreds of thousands of pounds in the hope their new album will make them popular enough to make it a career.
Record Companies are necessary evils who deserve their cut in recognition of the work and risk they put in.
To quote The Departed, we're all on our way out. Act accordingly..
10 Pence Short said:
Spiritual_Beggar said:
The industry is changing.
Internet and social network sites are the future for the industry.
Artists will seek to interact directly with fans via the internet, and slowly, the record companies will become obsolete.
'Word of mouth' is now the biggest advert for a band......and you do not need a record company for that. Just several dedicated followers on a network site.
The internet is just an alternative medium for promotion and distribution of music. The job of the record companies is still necessary and the same.Internet and social network sites are the future for the industry.
Artists will seek to interact directly with fans via the internet, and slowly, the record companies will become obsolete.
'Word of mouth' is now the biggest advert for a band......and you do not need a record company for that. Just several dedicated followers on a network site.
Do you expect retailers to negotiate terms with every single individual artist? Notwithstanding artists having to support their own costs, of course. I cannot imagine many young musicians willing to take a punt on hundreds of thousands of pounds in the hope their new album will make them popular enough to make it a career.
Record Companies are necessary evils who deserve their cut in recognition of the work and risk they put in.
Artists can sell their music direct from their own websites? Circumnavigating any retailers. They set their own price...and fans will buy direct from their site!
I already buy most of my music direct from the artists websites.
If an artist wants to have their music sold via a big retailer (iTunes, Napster, etc) because they feel they may get more notice...then they can agree to the terms set by that retailer...or go somewhere else.
I think the role of a record company as the means to get a band noticed will be replaced by the Social Network sites.
I make music in my spare time (Reason & Ableton), and for the cost of the music programs, computer, and electricity, I can get as many albums as I like onto a website and sell them if I wanted. It's that cheap. Obviously, for better recording, and sound production you can go to studio's etc, at additional cost.....but the principal remains; My music could be accessible to everyone with internet access in the matter of minutes.....and at minimal cost.
When these debates crop up, I'm always intrigued as to what the anti-record company people really want to see happen?
There is never going to be this utopia of free, high quality, readily distributed and promoted music for all to download whenever they want without a catch. Someone will always want to get paid and artists will always need the back office, creative and financial functions provided by record companies.
It'll be interesting to see the longevity of sites such as Spotify to see if an alternative model to individual purchases works out, as I see that as the biggest sea change at present. And, of course, that's still generating the revenue needed by the creators and suppliers of the material.
Pretending the music scene would be sustainable or a desirable alternative without expecting money to change hands for the end product just seems niave, in my opinion.
There is never going to be this utopia of free, high quality, readily distributed and promoted music for all to download whenever they want without a catch. Someone will always want to get paid and artists will always need the back office, creative and financial functions provided by record companies.
It'll be interesting to see the longevity of sites such as Spotify to see if an alternative model to individual purchases works out, as I see that as the biggest sea change at present. And, of course, that's still generating the revenue needed by the creators and suppliers of the material.
Pretending the music scene would be sustainable or a desirable alternative without expecting money to change hands for the end product just seems niave, in my opinion.
Spiritual_Beggar said:
10 Pence Short said:
Spiritual_Beggar said:
The industry is changing.
Internet and social network sites are the future for the industry.
Artists will seek to interact directly with fans via the internet, and slowly, the record companies will become obsolete.
'Word of mouth' is now the biggest advert for a band......and you do not need a record company for that. Just several dedicated followers on a network site.
The internet is just an alternative medium for promotion and distribution of music. The job of the record companies is still necessary and the same.Internet and social network sites are the future for the industry.
Artists will seek to interact directly with fans via the internet, and slowly, the record companies will become obsolete.
'Word of mouth' is now the biggest advert for a band......and you do not need a record company for that. Just several dedicated followers on a network site.
Do you expect retailers to negotiate terms with every single individual artist? Notwithstanding artists having to support their own costs, of course. I cannot imagine many young musicians willing to take a punt on hundreds of thousands of pounds in the hope their new album will make them popular enough to make it a career.
Record Companies are necessary evils who deserve their cut in recognition of the work and risk they put in.
Artists can sell their music direct from their own websites? Circumnavigating any retailers. They set their own price...and fans will buy direct from their site!
I already buy most of my music direct from the artists websites.
If an artist wants to have their music sold via a big retailer (iTunes, Napster, etc) because they feel they may get more notice...then they can agree to the terms set by that retailer...or go somewhere else.
I think the role of a record company as the means to get a band noticed will be replaced by the Social Network sites.
I make music in my spare time (Reason & Ableton), and for the cost of the music programs, computer, and electricity, I can get as many albums as I like onto a website and sell them if I wanted. It's that cheap. Obviously, for better recording, and sound production you can go to studio's etc, at additional cost.....but the principal remains; My music could be accessible to everyone with internet access in the matter of minutes.....and at minimal cost.
When are you embarking on a stadium tour?
I take it there's absolutely nothing to stop you doing those things at present?
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