Unsprung Media

 

I broke out into a cold sweat.  There’s actually a seven-cent per track differential between the highest return to my artist and lowest return to my artist, and two options in between.  

So I’m thinking, so far today I confidently purchased a latte for $2.25, ham and eggs for $4.00, bottled water for $1.40, Twinkies for $1.00 and an episode of 24 on iTunes for $1.99; but this seven-cent Amazon decision really stumped me.  Should I choose the highest price, the lowest price, or one of the two options in between?  

If I made the wrong decision, how could I go back to my artist and tell him I cost him seven cents per track, or that I lost a couple of hundred sales because I set the margin seven cents too high?  I mean this is chicken nugget money we’re talking about; gas in the van, new strings for the guitar, a six pack of beer… This is not a decision you make without consulting your magic 8-ball.

Amazon’s variable pricing rocked my world; now I can see the absurdity of what I do for a living.  Seven freaking cents of gross margin decision-making.  Do consumers really give two shits about this?  No, most don’t.  Pick the highest price (Front Line Pricing) and go back to cooking dinner.

There are three general types of music consumers: those that pay, those that don’t, and those that consume ads in exchange for listening to or downloading music.  Those that pay do so for convenience; those that don’t do so for price; and those that absorb ads are somewhere in the middle (ads cost you time and time is money).  

My best Monday advice is to put you music everywhere for free and put your music everywhere for the most money you can get for it.  Those that buy digital music want convenience and they don't care about a small price differential, and everyone else is heading toward free or into ad-driven consumption models.

Use caution when giving away your tracks, but put your music into anything that takes it.  Do anything you can do to get into 200,000 iPods.  If your music is great you’ll be able to make money from shows, merchandise and from new things we haven’t even seen yet.  Don’t sweat the seven-cent decisions.  Digital music revenue is a joke anyways; so go for that extra seven cents while you can still get it.

To all of the variable pricing model sites – sorry.  Nobody but your platform is going to make money at any price between 10 and 99 cents.  Your platforms may push out a small pile of songs, but artists can’t live off that!  If exposure is your value proposition to artists, then set your price to $0.