Music Label Execs Are Idiots

june 17, 2004

I was looking at getting some new music for my iPod because Eileen just gave me a $15 iTunes Music Store gift card (the blue one from Target). I found some music that was pretty cool and I wanted to pick up the "CD" at iTunes Music Store. It cost $11.99 for the whole "CD". Huh? Yeah, I ran into that problem of record company greed again. I don't blame Apple for this, but I do blame the record companies. In some stupid play for more money, the record companies are jacking up the prices of digitally downloadable music. I was looking at Overseer's Wreckage at iTunes and the digital download cost $11.99. Over at Best Buy the physical CD cost $10.99 and was in stock to be picked up. What is going on here? At Amazon the physical CD cost $11.99 just like at iTunes Music Store, but there is some shipping cost associated with the Amazon purchase. Hey Music Label Execs: Stop being such idiots and wake up to the fact that digital music is the future. Stop trying to charge retail physical CD prices for digital downloads and maybe you will sell more music. As I said in my previous article: Chop the price of music by half for digital downloads. Sell a full CD for $5.99 online. Sell individual songs for 49 cents. Make it about selling in volume and not about high initial price. It does not take a rocket scientist to figure out that people like digital music. It also does not take a rocket scientist to figure out that people are not buying as many physical CDs as before. People are using iTunes Music Store, Napster and the few other online music stores, but probably not as much as they could be. If one is not buying physical CDs, even though they are lower priced than online stores, then that is a loss of a sale since one would probably not pay more for a digital download. If you, record label execs, know that people like to buy digital music why not give them a good reason to pay for the music. Stop spending the millions (or billions) paying lawyers to chase after people who use peer-to-peer file sharing networks. Instead call that saved money and drop the prices of digital music. If you give people what they want at a good price point then they will buy it. Hell, people buy bottled water when tap water is free. Why? Because people perceive the value of bottled water to be worth the cost of paying for that water. Why are people downloading music from p2p networks? Because the perception of the value of digital music compared to the cost of digital music is not where it should be. Lets, stepping back for a second, ponder why people might think this? Maybe it is because the cost of digital music is more than the cost of physical media. Wake up music execs to the fact that you are not serving your customers and that you are not helping to curb the use of p2p networks -- you are only exacerbating it. Lower the prices of digital downloads and people will stop "stealing" music. Give them a reason to buy music online.

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