Future of The Music Industry

Thursday, January 20, 2005

Apple Itunes back together

According to a posting on Apple's Web site, Pepsi plans to distribute up to 200 million free songs in a promotion that kicks off at the end of the month.

http://news.com.com/Apple+eyes+fizz+in+Pepsi+iTunes+giveaway/2100-1047_3-5540502.html

Friday, January 14, 2005

Promotional Music Downloads

Promotional Music Downloads  - A Tool for Branding and Sales Generation

Pundits declared the recent Pepsi/iTunes promotion a mediocre success because only five million of the 100 million winning caps were redeemed during the two-month period of the campaign. Despite the lack of overwhelming success, additional promotional music download campaigns are proliferating throughout the US.

Key Questions

  • How can marketers and music services best use promotional downloads?
  • What audiences should companies target with these campaigns?

payment breakdown comparison CD vs. Itunes

ITunes Breakdown:

Artist:
$0.99 download single song price to the consumer
less $0.34 to Apple
left $0.65 x 130% ( wholesale markup) x 12% (net artist net rate) = $0.10

Producer
$0.99 download single song price to the consumer
less $0.34 to Apple
left $0.65 x 130% (wholesale markup) x 3% (producer rate) = $0.025

 

CD Breakdown:

Here is a price breakdown from CD sales from Furdlog

This breakdown of the cost of a typical major-label release by the independent market-research firm Almighty Institute of Music Retail shows where the money goes for a new album with a list price of $15.99.

$0.17 Musiciansunions
$0.80 Packaging/manufacturing
$0.82 Publishing royalties
$0.80 Retail profit
$0.90 Distribution
$1.60 Artists royalties
$1.70 Label profit
$2.40 Marketing/promotion
$2.91 Label overhead
$3.89 Retail overhead

http://msl1.mit.edu/furdlog/index.php?p=2658

 

 

gates and communists

Bill Gates recently had an interview with CNET that all ipod hipsters responded by shouting "he's calling us communists! bahahaha!" here's Gizmodo's interview with him after that. I love his metaphor of speedbumps for DRM and this is exactly what I think DRM is about.

There will always be new ways and techniques for copying music illegally but hopefully purchasing music will be so much more convenient than it is now that people will prefer to go the respectful way. For now however, I see there are no fines for ipod users driving over the speed limit.

Here's the interview:

http://www.gizmodo.com/gadgets/portable-media/gates-interview-part-four-communists-and-drm-029706.php

"Well, ignore DRM for a second. Should an artist that creates a great song be paid for that song? That's where you have to start. You don't start with DRM. DRM is just like a speed bump that reminds you whether you're staying within the scope of rights that you have or you don't. So you don't start with DRM. That's like saying, 'Do you believe in speed bumps?' You have to say, 'Should people drive at 80mph in parking lots?' If you think they should, then of course you don't like speed bumps."

a new blog, an obscure future

Nobody knows what the future will be for the music industry. In this blog we'll try to have an idea, guess and predict this future. Step by step. tune by tune.