Pricing Digital Music: An academic perspective

April 25, 2007

the_analog_hole_is_my_ear.pngTrolling SSRN I came across another academic report destroying much of the FUD put out by the RIAA in their attempt to criminalize digital downloads. Like all good academic studies it has a cumbersome and wordy title, The Analog Hole and the Price of Music: An Empirical Study, which belies the rather simple text contained within.

The report starts off with an exploration of the analog hole , which frankly isnt that interesting but then goes into how the analog hole will effect the pricing of digital music. They set off to answer two questions: Do consumers perceive a difference between analog hole copies and the originals? Kinda. At what price would they be willing to sacrifice some quality? Twenty-five cents. The sample size is pretty small for the survey, only 66 respondents, but the findings are really interesting. Read the full report here and check out the abstract here:

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IFPI: Digital Musics Gonna be Big

January 17, 2007

screenhunter_014.jpgThe good folks at the IFPI released a report (pdf) today which pegged the size of the digital music industry at $2 billion. This is double the size it was in 2005 and while thats great news, but still doesnt cover the homaging in the rest of the industry. Music sales are expected to continue its on going decline by another 3% drop in global music sales this year. Besides the news that “digital is big and growing”, the most interesting bit of info in the report was the split between online and mobile, which music was generally evenly split 50/50 online/mobile. Who knew? The only other bit of the report worth reading was the quotes from various music industry executives.


Pontificate like a Pro: Research Summary

November 12, 2006


(Pontificate 1999)
Two reports have come out this month that are worth taking a look at. The first is from the phoenix of Wall Street, Mary Meeker, who has survived greed and scandals to once again reign as one of the leading Internet pundits. The second is David Sifry’s quarterly report on the “State of the Blogosphere”, which unfortunately continues to use a linear ranking of the Blogosphere rather then adopting my Caste system. If you’er up for a PowerPoint and some good reading then you’d be well served to take a look at both of these reports in detail, but if your happy with the talking points, I’ve summarized them below for you to use when pontificating.
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Music Biz Misplaces $40 Billion. Opps!

April 17, 2006

Back in February I attended a panel discussion with the always humorous, Chief Digital Officer of MTV, Jason Hirschorn. One of the many provocative questions he threw out to the audience was "what are people filling their iPods with" given that only a billion songs have been sold for the 43 million iPods in circulation. Thats less then 25 songs per iPod! Great question Jason.

With all the expensive consultants and overpaid MBA's roaming the halls within media companies you'd think that a few of them would be able to figure this out. Alas, its not to be. Given, that I was once an underpaid consultant and I'm now an inexpensive MBA roaming the halls of a media company, I figure it wouldn't hurt anything if I gave it a try. After "running the numbers" (spreadsheet here), I came up with a couple of answers. One is that the music industry has lost roughly $40 billion dollars in revenue from not aggressively pursuing digital distribution. Read the rest of this entry »