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Martian · 03-26-2008, 02:32 PM

I think there needs to be a distinction made between 'willing to pay the artist' and 'unwilling to pay at all.' I love music, and it's a huge part of my life and who I am. Independent artists are always going to get support from me, particularly those who choose to make a career out of it. For the record, I have in my cd player right now a CD which features one of our own forum members, who is also part of a self-managed band.

I go to shows as often as I'm able and will gladly pay to do so. Sure, some of the top name artists are over-priced (tickets to see Eric Clapton in Toronto were more than $200 per, last time I checked) but I can understand that it's a result of supply and demand. And when I can see the Arcade Fire at a smaller venue for $35, support an independent band with my money and have a great evening all at the same time? That's about as good as it gets, as far as I'm concerned.

Personal feelings aside, the simple and objective fact of the matter is that online distribution is now the way things are done in the music industry. CDs are still an important aspect, as you point out, and probably will be for the foreseeable future; on the other hand, the world has embraced online distribution models, even where the artists or labels have not. I'm sympathetic to your concerns, but upset about it or not, you can't avoid online music and file sharing; your only options are to go with it or be left behind.

I'm not in a band right now; currently my music exists purely for my own enjoyment. This may change in the future; I would dearly love to make a living by making music, but unfortunately it's not an option for me at this point. Were I in a band, however, I would be very happy to see people enjoying my music and would be more than willing to offer it for download in order to facilitate that. There are methods for bands to offer music for small amounts of money and still make a fair bit from it; Nine Inch Nails and Radiohead are the first two to try allowing fans to set their own price, but I doubt they'll be the last. Further, from a business perspective it's equally if not more important for young or obscure bands to increase their brand recognition in any way possible. People won't buy your CDs or tickets or t-shirts or anything if they don't know you exist.

Out of curiosity, what does your Grammy winning producer offer that a local one doesn't? A Grammy doesn't guarantee that everything he touches will turn to gold, and the expense of hiring him is only justified if you expect that he will increase your revenue by more than he costs you.

As a business man, here's how I'd approach your question.

Costs are the same as you list:

Rent - $3000 / year
Gas $960 / year
Instruments - $200 / year
PR - $250 / year

For our agreed-upon total so far of $4410. CDs are worth examining separately, since they have their own cost and profit margin. Let's do that.

I'm not going to go over your cd costs individually. For now let's just assume that there's absolutely nothing wrong with your numbers and take $2610 as the cost of producing 1200 CDs per year. Note that this does include mastering as a reoccurring cost, which assumes that you're producing one 10-track cd per year, but there's no reason why an independent band couldn't be so prolific as that.

So we have our cost of $2610. You said yourself that you charge $10 per CD. So, in order for CDs to make a profit rather than a loss, you need to sell more than ($2610/$10) or 261 CDs per year. Given that you're doing a new pressing of 1200 every year and that you dismiss lots of 300 as not being cost effective, I think we can safely say that you're probably moving more than that. In fact, if we assume a per unit cost of $1.00 per CD based on your assertion that producing a run of 300 CDs costs "almost twice as much" per unit, we can see that it's still more cost effective to use the smaller runs for annual sales numbers up to 600 units, meaning it's safe to assume that you're moving more than that, probably at least 700. Therefore, we can state that CDs are making you ((700*10)-$2610) or $4390. Applying that back to our original number of $4410, we see that you need only sell $20 worth of tickets in order for your band to turn a profit that year. Given that, I would further conclude that CDs, rather than being a means to make a profit themselves, are actually a vehicle that serves as advertising and also covers expenses, allowing you to pocket most or all of the money made from playing live shows. When viewed from that perspective, file sharing is actually a blessing, since while it doesn't add to your income, it doesn't add to your expenses either; it's essentially free advertising and is extending the effectiveness of advertising offered by your CDs farther than would ever be possible by conventional means. So long as you continue to sell your 700 or so CDs per year (actually 703 if we want them to cover costs entirely) then file sharing is really your best friend, since it will get more people out to your shows where you really get to make your money. The whole thing is scalable too, since larger costs generally denote larger venues, which means more tickets sold and more money made.

Oh, and those people who ask you for a free download? There's two ways of looking at them. The first is to see them as ignorant free loaders, which is apparently what you've chosen. The second is to listen to what they say to you and interpret it as a message. They're telling you that they don't think your CD is worth $10. If it's only the odd one I wouldn't worry about it to much, but if it happens a lot then maybe you need to either 1) come up with a way to add value to your CD or 2) figure out a way to distribute your music that is more cost effective and therefore allows you to set a lower price.

I like the second way of looking at it myself, but then it appears that you and I have very different ideas about how the music business should work.

03-26-2008, 02:32 PM	#3 (permalink)
Martian Young Crumudgeon Location: Canada	I think there needs to be a distinction made between 'willing to pay the artist' and 'unwilling to pay at all.' I love music, and it's a huge part of my life and who I am. Independent artists are always going to get support from me, particularly those who choose to make a career out of it. For the record, I have in my cd player right now a CD which features one of our own forum members, who is also part of a self-managed band. I go to shows as often as I'm able and will gladly pay to do so. Sure, some of the top name artists are over-priced (tickets to see Eric Clapton in Toronto were more than $200 per, last time I checked) but I can understand that it's a result of supply and demand. And when I can see the Arcade Fire at a smaller venue for $35, support an independent band with my money and have a great evening all at the same time? That's about as good as it gets, as far as I'm concerned. Personal feelings aside, the simple and objective fact of the matter is that online distribution is now the way things are done in the music industry. CDs are still an important aspect, as you point out, and probably will be for the foreseeable future; on the other hand, the world has embraced online distribution models, even where the artists or labels have not. I'm sympathetic to your concerns, but upset about it or not, you can't avoid online music and file sharing; your only options are to go with it or be left behind. I'm not in a band right now; currently my music exists purely for my own enjoyment. This may change in the future; I would dearly love to make a living by making music, but unfortunately it's not an option for me at this point. Were I in a band, however, I would be very happy to see people enjoying my music and would be more than willing to offer it for download in order to facilitate that. There are methods for bands to offer music for small amounts of money and still make a fair bit from it; Nine Inch Nails and Radiohead are the first two to try allowing fans to set their own price, but I doubt they'll be the last. Further, from a business perspective it's equally if not more important for young or obscure bands to increase their brand recognition in any way possible. People won't buy your CDs or tickets or t-shirts or anything if they don't know you exist. Out of curiosity, what does your Grammy winning producer offer that a local one doesn't? A Grammy doesn't guarantee that everything he touches will turn to gold, and the expense of hiring him is only justified if you expect that he will increase your revenue by more than he costs you. As a business man, here's how I'd approach your question. Costs are the same as you list: Rent - $3000 / year Gas $960 / year Instruments - $200 / year PR - $250 / year For our agreed-upon total so far of $4410. CDs are worth examining separately, since they have their own cost and profit margin. Let's do that. I'm not going to go over your cd costs individually. For now let's just assume that there's absolutely nothing wrong with your numbers and take $2610 as the cost of producing 1200 CDs per year. Note that this does include mastering as a reoccurring cost, which assumes that you're producing one 10-track cd per year, but there's no reason why an independent band couldn't be so prolific as that. So we have our cost of $2610. You said yourself that you charge $10 per CD. So, in order for CDs to make a profit rather than a loss, you need to sell more than ($2610/$10) or 261 CDs per year. Given that you're doing a new pressing of 1200 every year and that you dismiss lots of 300 as not being cost effective, I think we can safely say that you're probably moving more than that. In fact, if we assume a per unit cost of $1.00 per CD based on your assertion that producing a run of 300 CDs costs "almost twice as much" per unit, we can see that it's still more cost effective to use the smaller runs for annual sales numbers up to 600 units, meaning it's safe to assume that you're moving more than that, probably at least 700. Therefore, we can state that CDs are making you ((700*10)-$2610) or $4390. Applying that back to our original number of $4410, we see that you need only sell $20 worth of tickets in order for your band to turn a profit that year. Given that, I would further conclude that CDs, rather than being a means to make a profit themselves, are actually a vehicle that serves as advertising and also covers expenses, allowing you to pocket most or all of the money made from playing live shows. When viewed from that perspective, file sharing is actually a blessing, since while it doesn't add to your income, it doesn't add to your expenses either; it's essentially free advertising and is extending the effectiveness of advertising offered by your CDs farther than would ever be possible by conventional means. So long as you continue to sell your 700 or so CDs per year (actually 703 if we want them to cover costs entirely) then file sharing is really your best friend, since it will get more people out to your shows where you really get to make your money. The whole thing is scalable too, since larger costs generally denote larger venues, which means more tickets sold and more money made. Oh, and those people who ask you for a free download? There's two ways of looking at them. The first is to see them as ignorant free loaders, which is apparently what you've chosen. The second is to listen to what they say to you and interpret it as a message. They're telling you that they don't think your CD is worth $10. If it's only the odd one I wouldn't worry about it to much, but if it happens a lot then maybe you need to either 1) come up with a way to add value to your CD or 2) figure out a way to distribute your music that is more cost effective and therefore allows you to set a lower price. I like the second way of looking at it myself, but then it appears that you and I have very different ideas about how the music business should work. __________________ I wake up in the morning more tired than before I slept I get through cryin' and I'm sadder than before I wept I get through thinkin' now, and the thoughts have left my head I get through speakin' and I can't remember, not a word that I said - Ben Harper, Show Me A Little Shame