Digital Media Digest

Consumers want songs.  There are exceptions when it comes to artists like Pink Floyd, but the main reason that consumers bought albums for years is because they had to.  It was the only way to get the song they wanted and there were no easy technological workarounds.  The music industry is fooling itself if it thinks the consumer will ever go back to buying albums or that bundling records up as digital Album Only purchases will actually help.

Pandora’s box has been opened.

It was essentially a race to zero.  The labels began streaming early on.  They could get around publishing fees that way and still expose their artists.  Then there was the “Free Download”, as if that was going to curb the appetite for P2P use.  After the free download, it was the free EP because intuition, or insecurity rather,  said that “One song just wasn’t enough,” and now we have successfully moved to giving away the full album.  From Radiohead to Nine Inch Nails, to Coldplay, and beyond.  These high profile stunts have trained consumers to expect free or at least deep discounted products and to bypass anything at full price.  Each of these stunts were loss leaders for tickets, merch, or future premium products which directly benefited those artists.  The problem is that most labels don’t benefit from tickets, merch, or in some cases premium products.  They only own the content so treating it like a loss leader is counterproductive.

When you go to Wal-mart to grab a deep discounted CD (or loss leader), Wal-mart is banking on you buying a plunger and a toothbrush before you leave.  When you buy an album at a deep discount, the label hopes that you will tell your friends so they go buy it, pack mom’s minivan with friends headed to the show where you all come home wearing the t-shirt.

The reality is that you won’t tell your friends, you’ll just burn them a copy, and the label won’t make a dime off of the ticket sales or merch.  The reality is that you can’t be your own loss leader.  It’s either time for the labels to successfully invest in plungers and toothbrushes (figuratively speaking), or time for management and booking agencies to begin participating in recording costs.  In the meantime, the labels need to be doing everything they can to stop devaluing their lifeline – recorded music.