For the Love of Music

Posted on Sunday 4 June 2006

Interesting article on Reuters (Link) concerning the difficulty in placing a value on music. The piece mentions the following pricing models currently in play:

  • The CD Model – this is basically looking at assumed prices for manufacturing tangible products and coming out with a standard $1 per track figure.
  • The Variable Model – in this one music prices are set relevant to a number of factors, such as popularity and age of the music.
  • The Convenience Model – for the mobile crowd that just has to have the latest tune, this model basically puts pricing in the hands of the labels and retailers (or carriers).
  • The Value-Added Model – here the labels would bundle additional content with the music track; what most of us would call useless junk.
  • I’ve heard of these models before, but unfortunately I still don’t see what I’d call “The Experience Model“. In that scenario digital music is free. If people want it on CD or want something else tangible, they pay for the manufacturing just like any other product. Where the real money comes is from bundling an experience with the music. Fans would pay for the experience just like they pay now to go to an amusement park. There are ways to do this; some of which I’ve mentioned on this blog. The one thing that isn’t going to make labels happy is that it’s effectively a label-free concept. Sorry guys.

    Now for those of you wondering why this blog about design, virtual worlds, and rapid manufacturing should bother discussing music, the answer is simple: I see “The Experience Model” as the future. Music is only the first product. Next will come movies.

    Eventually, as rapid manufacturing develops in the decades to come and people can fab their own products at home or at local service bureaus, the 3D files used to create today’s manufactured products will follow in music’s footsteps. If you’re an industrial designer, no matter what you think of Karim Rashid, you’d do well to learn by his example. There’s added value in Reputation.

    1.  
      glitch
      6/5/2006 | 5:45 am
       

      i know it’s probably obvious and might not need to be said, but the experience model might *have* to be a social experience. connecting users to a community of other people who also enjoy that particular song, movie, object and providing them with an experience.

      it’s more a question of how easy you want to make the experience to be versus how engaged (in an attention economy) your community is/ can be..

      seems as if the value-added model could be akin to the experience model. buy the cd, get the minigame for free…

      whereas a community experience (much like an amusement park) is a different beast altogether

      also, not sure how it’s a label-free model either. seems like the labels who make the profits off their collection of artists are really the only ones who can afford (time, resources, money) to provide, manage, enable an engaging experience, let alone a community experience. the price tag on the actual artist has to decrease when each song needs an experience to go along with it. the label (movie studio, ahem, tv network) beccomes, or continues to be, vitally important to the real health and success of a digital media artist

      unless, of course, the music is worth buying in itself. then you don’t have anything to worry about….although how that gets decided, by reputation mostly, is a model that definitely needs some more thought…

    2.  
      6/5/2006 | 10:28 am
       

      I don’t think it has to be a social experience in the way we typically think of Social. Back when Stephen King did his online novel I gave an example of having fans – who would not necessarily be part of a social network – participate in a competition which eventually led to the inclusion of the winner’s name in a future book. So this could be Social in a “I’m a fan in the database” sense. The payoff experience is really more personal: seeing one’s name in a favorite author’s work.

      The Value-Added Model with adding a mini-game is, for me, a bit like having a bank hand out free appliances. The Value-Added model is tied to the Experience Model, but the concept of Value is framed differently and the underlying assumption on Cost is different. I do, however, think the two will probably merge in some way.

      When I say the Experience Model is label-free, I mean that in the sense of what labels mostly do now: receive licensing rights from artists, package it (mostly on CD) and sell product for profit. I believe future labels will be more like social network search engine taste arbitrators (or something). They’ll focus on managing the Experience, not on property ownership. So you’re correct – and I agree – a label-like entity is necessary for the health of a media artist. The difference is in approach to how both parties interests are served and on what the business is focused. After all, what does Google really sell? Why does Moby so quickly license his work for advertising?

      We’re heading for a lowest common denominator world. At some point the design of a Tupperware container will be floating on the net and the only thing to sell will be the material a rapid manufacturing system uses to fabricate that in the consumer’s home. We’re in the transition from an Industrial Age to Star Trek’s utopian “replicator” technology. It’s going to be a painful economic shift imo.

    3.  
      glitch
      6/7/2006 | 2:53 am
       

      i do like the stephen king example. consumers not just simply buying products, but taking part in their creation.

      i would imagine (and have read in a few unsourced places) that there is a big debate going down in hollywood between the producers of movies (whose job it is to write and execute compelling narratives) and the studio executives (whose job it is to sell the experience) about handing over influence to what could be a insular vocal minority whose status, financially or otherwise, is dubious. …

      i would hope that they have learned from the music industry’s debacle and will embrace it….although I will definitely have to adjust to the coming shortage of summer blockbusters!

      it does have to be hard for a producer to hear about changes or additions or whatever to their movie based on the latest internet snark :)

      fox, (who also marketed the hell out of this movie through myspace) did it with x-men 3 (supposedly)…

      http://pop.wizbangblog.com/2006/05/26/the-snakes-on-a-plane-effect.php

      now dubbed the “snakes on a plane” effect

      is the experience model really a collaborative model?

      i ain’t buying something unless i’ve invested in….

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