The Price is Wrong

In that L.A. Times Dust-Up, on one of the days I proposed a six-part plan of what the music industry could do to try to turn its fortunes around. (Right now, they've given up on trying to sell consumers music; their plan is to lobby Congress to get $2 billion from the radio industry, $500 million from Internet radio, $1 billion from satellite radio, etc. They're using a specious umbrella of an argument that "music is moving to a consumption model." (That means no one's buying it. But that's simply because it's overpriced!) (Why are they doing this? Because they're lawyers, not marketers! And to a workman with a hammer, every problem looks like a nail.))

I'll add a link to the Dust-Up essay HERE soon.

Meanwhile, an Answer is starting to form in my mind... Let me try a rough draft:

First, sell medium-quality MP3s (32k? 64k?) so cheaply that kids can afford to fill up their iPods and that P2P (mistitled files, possible viruses, etc.) just won't seem worth the effort -- maybe 10 cents each.

Then offer full albums in decent quality (96k?) at a price that reflects the fact that there's nothing physical accompanying it. (The Sunday NYT online has all the content of the paper but they're smart enough not to try to charge $5 for it.) (Maybe $3?)

Finally, price CDs competitively with DVDs in terms of content-per-dollar. That probably means a price point of $4.99, I'm guessing... Maybe less. (Crap, I get my DVDs from the Blockbuster previously-viewed bin. When the promotional price gets down to $6.77, I buy armloads of them. But that's for 3 times the minutes of a CD... plus visuals...) Maybe $2.99 is the price point at which I buy armloads of CDs.

THAT'S the answer. Not lobbying and suing for wealth-transfers from other industries.

[By the way, AOL had the guts to do this -- they moved their price point from $15/month to "free"! The record industry needs to do a bold stroke analagous to that.]

This blog post probably belongs in my blog "The Maserati Imperative," not "Radio 2020."