Price Points vs. Perceived Value

One of the hot topics of conversation in digital music is price points. It’s such a grand term, and it makes you think big things. Of course, it’s really just two memes strung together: the idea of price, and the idea of points. Neither of which is really the issue at hand in the music business. Labels should be more concerned with the perceived monetary value of music if they don’t want to go bankrupt by the end of the decade.

Any conversation about digital media (also known as content) seems to focus on what to charge people, and how to control the services presented by content providers (including a desire by the major labels to continue to control the cost of music as if they were selling fuel).

The more artistically inclined probably find terms like content and product to be a horrible way to describe art and expression. This conflict in perception drives the heart of the digital music revolution, and the birth of post capitalism for artists.

How can you put a price on art? Apparently, it’s pretty easy to put a price on anything. In a true free market economy, the artists that evoke the greatest response and move the most people would always be the most successful. Mostly because people want to support things they believe in, make them feel good, and are fun. And all you have to do is look at the last one hundred years of recorded music to see how free this market has been.

My understand of ‘point’ in the fiscal sense is that points are percentages. Like when a major label gives you 6 points per track, and then you find out it’s 6 cents. On your own album. The obfuscation of literal meaning through fancy words has been a powerful ally in the way people have been exploited for a long time (-). We should call it the price of music instead. We talk that way about water, radio waves, and the written word, so why not music? Or we could talk about price points for oil, but then we’d all be spending too much time wondering where all that money is going. The true invisible hand of economics is the one that tries to turn our head away from the important issues, and focus on the ones the ‘majors’ want us to see.

Perceived value is the cornerstone of the future music as a revenue stream for artists. The idea that something is only worth what we are willing to give up for it. It doesn’t really matter if it’s time or money; the important thing is that it’s worth it to us. Myspace didn’t get bought by NewsCorp because it was a novel idea, but because the platform of Myspace was perceived as valuable. That’s the same reason the MPAA and the RIAA had Pirate Bay taken down (with the help of the US State Department).

It’s sort of a testament to the power of free press that the issue of the monetary value of music is driven by what people are paying for it, and not what people are making from it. It’s almost enough to make you think the average ‘music consumer’ sees the choice between music as no different than buying brand name or generic cola at the store.

Then again, maybe if it didn’t cost a dollar for a DRM encoded piece of music that only played on one platform, and the only format that has no signal loss is not catching on (http://flac.sourceforge.net/), maybe the price shouldn’t be so high.

If the price of a digital album, with no tangible product (and sometimes incomplete art) was lower, and if the artists were getting a fair share of the price, then maybe people would get the point and buy more music.

Then everyone would be happy, because no one would have to absorb the cost of breakage on physical albums (a cost usually relegated to the artists by major labels, sometimes even on digital releases).

The real price point questions should be things like: How many points does the artist get on the price?

Isn’t the point of having all of this fantastic musical technology to bring down the price of creating and releasing an album?

If the music is good, won’t people get the point, and pay a fair price for it?

Since people are paying no price but time and effort to find good music for free, shouldn’t the record industry stop trying to dictate people’s tastes and get the point that people want what they want?

And, most importantly: When will corporate multinational conglomerates get the point that music is the soundtrack of our lives, and that it’s priceless?