(entry last updated: 2003-03-03 13:00:45)
Well, I’ve really gotten a serious cold, and I’m under the gun to get a proposal done today, so it’s going to be thin. And, so far, all from the NYTimes.
Amy Harmon’s summary of the DRM Conference and the Spectrum Conference is Pondering Value of Copyright vs. Innovation.
The Times also tries to suggest that the record industry is getting its online act together in E-Music Sites Settle on Prices. It’s a Start. An interesting set of cost statistics that bears researching:
A basic wholesale price structure is coming together that online services can use to create product offerings. For example, a download of a song, with a suggested retail price of 99 cents, has a wholesale cost of about 65 cents from the labels, according to music executives.
The streaming services and tethered downloads have a more complicated price structure. Basically, the services pay between two-tenths of a cent and a penny to the label every time a user listens to a song. But there are monthly guarantees to the labels that together make the minimum monthly cost for music licenses to offer an unlimited streaming service about $5, according to music executives.
Internet radio is far cheaper for the online services to offer, costing stations seven-one hundredths of a penny a song for each listener, under a royalty arrangement the federal government set last year. And the services like MusicMatch’s Radio MX that let users choose the artist they want to listen to but not the song, have a wholesale price that is higher than regular Internet radio and less than services that let users pick each song.
“We found demand drops off quickly after about $5 month,” said Dennis Mudd, the chief executive of MusicMatch. Indeed, Radio MX, which has $2.95 and $4.95 a month options, has 120,000 subscribers, more than MusicMatch and PressPlay combined, according to analysts estimates. (Neither releases their subscriber counts, but they admit they are small.)
There is quite a debate about whether $9.95 (or $8.95 on AOL) is the right price for the unlimited streaming services.
A look at the selling of Robbie Williams to the US market gives an insight into the music business today, as well as EMI’s position.