Comments on: upsales http://gonze.com/blog/2008/07/28/upsales/ internet music technology Wed, 01 Feb 2012 12:32:04 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Crosbie Fitch http://gonze.com/blog/2008/07/28/upsales/comment-page-1/#comment-703 Crosbie Fitch Wed, 30 Jul 2008 07:48:37 +0000 http://gonze.com/blog/?p=386#comment-703 Sounds like endorsement to me - the manufacturer paying an artist to endorse their product. It's just like websites selling their audiences to advertisers, but in this case it's an artist selling the goodwill of their audience, and their own reputation. Either the artist really does endorse the product, and may not suffer significantly, or they can be recognised to have 'sold out' and their reputation diminishes. And what of unknown/lesser known artists? Is there the same attraction to a manufacturer in doing a deal with them? Sounds like endorsement to me – the manufacturer paying an artist to endorse their product. It’s just like websites selling their audiences to advertisers, but in this case it’s an artist selling the goodwill of their audience, and their own reputation.

Either the artist really does endorse the product, and may not suffer significantly, or they can be recognised to have ‘sold out’ and their reputation diminishes.

And what of unknown/lesser known artists? Is there the same attraction to a manufacturer in doing a deal with them?

]]> By: Lucas Gonze http://gonze.com/blog/2008/07/28/upsales/comment-page-1/#comment-698 Lucas Gonze Tue, 29 Jul 2008 19:37:08 +0000 http://gonze.com/blog/?p=386#comment-698 Eric, affiliate revenues on all upsales are a weird business model, but then again money is money. For musicians to get paid, they need to be earning on the real value of their work -- to give cultural cachet to neutral products like toilet paper and spark plugs. People don't care about detergent and they don't need CDs, they care about CDs and need detergent. Put them together and you have a real winner. "New and improved Tide: now with Aerosmith!" gurdonark, this is really well said: "The reality of the new technology is that, as advertised, it can make things less expensive and more efficient, which can remove some of the excess profits in the system." Eric, affiliate revenues on all upsales are a weird business model, but then again money is money. For musicians to get paid, they need to be earning on the real value of their work — to give cultural cachet to neutral products like toilet paper and spark plugs. People don’t care about detergent and they don’t need CDs, they care about CDs and need detergent. Put them together and you have a real winner.

“New and improved Tide: now with Aerosmith!”

gurdonark, this is really well said: “The reality of the new technology is that, as advertised, it can make things less expensive and more efficient, which can remove some of the excess profits in the system.”

]]> By: gurdonark http://gonze.com/blog/2008/07/28/upsales/comment-page-1/#comment-696 gurdonark Tue, 29 Jul 2008 16:31:48 +0000 http://gonze.com/blog/?p=386#comment-696 A pay-per-download engine will generate revenue in excess of its expense. A pay-per-download engine will not generate the per-album revenue that LPs did, or that CDs did. The reality of the new technology is that, as advertised, it can make things less expensive and more efficient, which can remove some of the excess profits in the system. Commercial tie-ins are a traditional way of licensing music. For some years now, for the artist, record deals are less about the artist making real money and more about promotion and rather unfavorable terms for borrowing of funds to promote touring. The economics of downloads is that artists will not suffer any more than they already have. The economics of advertising is that freed from record company hegemony, music will license directly from artist to commercial outlet, to the benefit of all. Even the artist who disdains commercial licensing probably wins, as that artist can now disdain as well record companies, and use the tunecore, the internet and touring to build the following that once only a major record label deal could help build. Such artists will inevitably arise--it's just how and when and what innovations in marketing they use to make it. A pay-per-download engine will generate revenue in excess of its expense. A pay-per-download engine will not generate the per-album revenue that LPs did, or that CDs did. The reality of the new technology is that, as advertised, it can make things less expensive and more efficient, which can remove some of the excess profits in the system.

Commercial tie-ins are a traditional way of licensing music. For some years now, for the artist, record deals are less about the artist making real money and more about promotion and rather unfavorable terms for borrowing of funds to promote touring. The economics of downloads is that artists will not suffer any more than they already have. The economics of advertising is that freed from record company hegemony, music will license directly from artist to commercial outlet, to the benefit of all.

Even the artist who disdains commercial licensing probably wins, as that artist can now disdain as well record companies, and use the tunecore, the internet and touring to build the following that once only a major record label deal could help build. Such artists will inevitably arise–it’s just how and when and what innovations in marketing they use to make it.

]]> By: Eric http://gonze.com/blog/2008/07/28/upsales/comment-page-1/#comment-695 Eric Tue, 29 Jul 2008 14:08:49 +0000 http://gonze.com/blog/?p=386#comment-695 Can Amazon enable FREE downloads w/ artist affiliate tracking? Would/Will they? What about Live!? It seems in my view the artist would prefer to focus on building attention and loyalty - and it would be great if that simply were the economics of music. Can Amazon enable FREE downloads w/ artist affiliate tracking? Would/Will they?
What about Live!?
It seems in my view the artist would prefer to focus on building attention and loyalty – and it would be great if that simply were the economics of music.

]]> By: Crosbie Fitch http://gonze.com/blog/2008/07/28/upsales/comment-page-1/#comment-693 Crosbie Fitch Tue, 29 Jul 2008 09:04:34 +0000 http://gonze.com/blog/?p=386#comment-693 I presume it goes something like this then: MP3 copy @ 99¢ """""""" Manufacturing/reproduction costs: 0¢ Royalty: 66¢ Customer Support: 22¢ Hosting/download: 11¢ Profit: 0¢ Presumably the label is laughing all the way to the bank, the musician has been cut out of the deal, and the retailer is left holding the baby. How much better a deal it would therefore be if the musician disintermediated themselves from the unviable copy-selling industry and started selling their music instead? FLAC master @ 0¢ """"""""""" Production: $100 Manufacturing/reproduction costs: 0¢ Hosting/download: $50 Audience incentive: $990 (1,000 fanatic patrons @ 99¢) Profit: $840 No royalty - files are copyleft. No support costs - files are freely copyable, the music is a priori without complaint. Cheap hosting - due to BitTorrent. Labels remain free to sell their promotion/discovery services to musician/audience, retailers are free to add value, musicians have money, audiences have music, and the public has its liberty. I presume it goes something like this then:

MP3 copy @ 99¢
“”"”"”"”
Manufacturing/reproduction costs: 0¢
Royalty: 66¢
Customer Support: 22¢
Hosting/download: 11¢
Profit: 0¢

Presumably the label is laughing all the way to the bank, the musician has been cut out of the deal, and the retailer is left holding the baby.

How much better a deal it would therefore be if the musician disintermediated themselves from the unviable copy-selling industry and started selling their music instead?

FLAC master @ 0¢
“”"”"”"”"”"
Production: $100
Manufacturing/reproduction costs: 0¢
Hosting/download: $50
Audience incentive: $990 (1,000 fanatic patrons @ 99¢)
Profit: $840

No royalty – files are copyleft.
No support costs – files are freely copyable, the music is a priori without complaint.
Cheap hosting – due to BitTorrent.

Labels remain free to sell their promotion/discovery services to musician/audience, retailers are free to add value, musicians have money, audiences have music, and the public has its liberty.

]]> By: victor http://gonze.com/blog/2008/07/28/upsales/comment-page-1/#comment-691 victor Mon, 28 Jul 2008 22:15:23 +0000 http://gonze.com/blog/?p=386#comment-691 @crosbie - because the discussion is about how everybody *except* the musician makes money along the way. Running Amazon costs money even if the incremental cost of posting a song is pennies. @crosbie – because the discussion is about how everybody *except* the musician makes money along the way. Running Amazon costs money even if the incremental cost of posting a song is pennies.

]]> By: Crosbie Fitch http://gonze.com/blog/2008/07/28/upsales/comment-page-1/#comment-690 Crosbie Fitch Mon, 28 Jul 2008 22:02:58 +0000 http://gonze.com/blog/?p=386#comment-690 How can you not make an infinite profit out of something even priced at a penny that costs nothing to produce? How can you not make an infinite profit out of something even priced at a penny that costs nothing to produce?

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