Evaluating a System for Selling and Delivering MP3s?

Dredd2Kad asks: "I'd really like Slashdot's opinion on this. I recently secured an MP3 distribution deal with an indie record label, and negotiations with other indie labels and artists are in the works. The music will be distributed through my internet radio station's website. As you know, if you can sell music in a format such as MP3 you eliminate the costs of packaging, shipping, handling. You do have to contend with bandwidth charges though. Most indie labels and artists seem happy to pass along the savings to customers and stimulate sales. What I have built is simple and functional. We are trying to add value to the MP3 albums we sell by including quality artwork that can be printed onto CD labels and jewel case inserts (so you aren't just getting a 'bunch of files'). What would make you want to buy music in this way? What types things would turn you away? What are the positives and negatives of selling music in this manner? Do you think this is a viable alternative to someone who doesn't want to pay $10 or $15 for a physical CD? Does the format the music is in or on have an impact on how serious you take it?"

Comments

I pay attention to the music

[kevinatilusa]

Regardless of whether I can print fancy jewel case covers/inserts out, I wouldn't really see your music as "just getting a bunch of files" any more than I would see a CD as "just getting a bunch of 0's and 1's". Ideally, I would like to focus on just two things, the quality of the music you play and the quality of the transfer of the music into the file. I would be willing to pay much more for those things than I would for the extras you mention.

Adding value

[dew-genen-ny]

I'd love to see as much thought that goes into a cd album being put into this :

Specifically, I'd definately pay for a package that contained:

High quality vbr mp3s.
Multiple peices of album artwork, not just a scan of cd-album front cover.
Lyric files to all the MP3s.
Where available guitar chords as well.

I think that copy protection would be a big turn off. For indie bands, I reckon that the majority of people would be happy to buy, even if they could get it for free, just as a matter of support.

Perhaps an introduction to the album by the artists concerned.

And of course, some decent music ;)

Turn offs...

[duffhuff]

What types things would turn you away?

Juit quickly:

1. Low quality and / or fixed format files. MP3 has a large market penetration and LAME is a great codec for 99% of the material, but I'd like to be able to download FLAC, WAV, OGG, or something else. Preferably a clean open lossless standard i.e. FLAC. If the track costs more for the high-quality version then the regular MP3 version I'm okay with that.

2. Forced to purchase a full album over single tracks. This is a big turn off for me, as I find only a few tracks are really worth it.

3. No preview of tracks. I'm not entirly sure if this is bad or not, but some way of previewing, either by a short clip, or a really low quality version of the song, is definately nice.

4. No support for countries outside of the US.
Obviously the US would be the biggest market to start out with, but support for Canada is a cruicial second IMO. Apple's iTunes Music Store doesn't (to my knowledge) support Canada yet, so I can't yet take advantage of it. Ideally, the system would be able to easily support all countries, perhaps with credit cards this is possible, but I see some possible legal implications here.

Albums

[sql*kitten]

What I have built is simple and functional. We are trying to add value to the MP3 albums we sell by including quality artwork that can be printed onto CD labels and jewel case inserts (so you aren't just getting a 'bunch of files'). What would make you want to buy music in this way?

Firstly, I would like to say that this isn't intended as a slur on your musicians.

You must understand where the album came from, why it exists. It is an example of technology leading art. When the technology existed to fit n minutes of music onto a record, musicians started to produce works that were n minutes long. This is why first there were singles, then albums. This has meant that much of what is on an album is filler. I'm looking at my rack of CDs now, and most of them I bought for a few (3-5) great tracks out of a total of roughly 10. The MP3s I have online to listen to aren't complete albums, just the good somgs from each album. There are plenty of albums I can put on as background music, but few that I'd actually want to listen to. Some vendors (like Apple) are starting to understand that the album is an artificial construct... what people really want are individual songs, delivered efficiently. You can't do that so easily on CD, because there isn't so much of a price differential for a retailer to stock a CD album as a CD single (i.e. transportation costs, staff costs, etc are all the same). But now you can, with the network and the MP3 format.

So, the thing that would make me buy online is being able to construct my own "greatest hits" album from a musicians entire catalogue, and get it sent to me on SACD or DVD/A. I'm not even worried about buying compilations of different artists - I can do those myself on my HD after all.

This model is bad for some "artists" because it means they can't make money from filler, but it's good for real artists and their fans, because the percentage of an album that's worth listening to (and hence buying) is so much higher. And it's bad for record labels either way...

Re:Albums

[Tet]

There are plenty of albums I can put on as background music, but few that I'd actually want to listen to.

Then I can only say that your listening habits are significantly different to mine and most of the people I associate with. It's rare for me to buy an album with more than a couple of poor tracks. The artists I like fairly consistently produce a solid collection of tracks with very little filler. There are a few exceptions, the odd one hit wonder that really doesn't have the songwriting ability to make a full album of music. But that's the exception, not the rule. Perhaps that's a consequence of listening to a genre of music (heavy metal) that's so under represented in the mainstream media that the concept of a single is almost unheard of. Most of my favourite bands only make albums -- there's no point in making a single, because it's never going to get played anywhere anyway. Or perhaps it's some other reason entirely...

P.S. Today's music recomendation: Masterplan's eponymous debut album. Feel the soulburn...

Amazon It!

[plasticmillion]

I agree with all the previous comments: price, speed, choice of quality, etc. are all important. I would add in this context that having an online account would be a big plus, so that I can pay in a certain amount (say $10-20) and then buy tracks out of that account, rather than having to bill my credit card every time for $.79 or $.99 or whatever.

Most importantly, the user experience needs to be attractive since this is a very competitive space (and a lot of your competition has a compelling price point: free). Take a long, hard look at Amazon.com, which is the best e-commerce website I know. Notice how they have striven to make the purchasing process fun and informative. Notice also how the information-rich experience they provide helps to cross- and upsell customers ("People who bought X also bought Y"). If you can include ratings, recommendations, user comments, etc. in your site in a way that is slick and easy to use, that will definitely help to attract and retain customers.

People also want quality features.

[HanzoSan]

The problem is people think selling mp3s is a good idea, you have to sell services and INCLUDE mp3s.

Selling mp3s is like selling webpages, people will not pay on a per site basis, EVER.

However, people will pay for quality and service, people do subscribe to gaming sites, if you offer it at a cheap $1 a month, or $12 a year, people will subscribe. You also must offer alot of things in the members sections, not just mp3s, but video clips, tourdates, blogs, forums, pictures,interviews, etc. You have to make it into almost an online magazine, you need to build a community, then you charge people to access that community

You charge the fans to access a SCENE, because to the fan, its all about the scene, just like to the musician its all about the art. Treat it like what it is, art! Do not treat it like product, when you treat it like product and worry about how many sales of mp3s you'll get, you wont sell any.

I suggest you let a person subscribe to your site, your fans will subscribe, you may only have a few thousand fans, but thats enough. 5000 people paying $12 a year, is decent money, more money than you'd make trying to sell mp3s.

Re:People also want quality features.

[CastrTroy]

I would have to say otherwise. What you really want to do, is sell to the people with the lowest IQ's. The fact that Ron Popeil(the infomercial guy) is still on TV on a regular basis, as well as countless other stupid infomercials, shows that there's definitely money to be made in selling to the people with a high money to brains ratio. This can be done by either your method, of selling to people with lots of money, or by the other method of selling to those without brains.

Re:People also want quality features.

[Rogerborg]

>It was just an example

It was indeed a perfect example of how vague handwaving and "oh, but of course" economics fall flat on their face when you're not living in your parents' basement.

>If you are hiring a webguy and doing all this stuff, you better be a damn good band.

But if you can't afford a webguy, how do you let people know how good you are. Hmm, that reminds me of something:

Bill: Ted, while I agree that in time our band will be most triumphant, the truth is Wyld Stallyns will never be a super band until we have Eddie Van Halen on guitar.
Ted: Yes Bill, but I do not believe we will get Eddie Van Halen until we have a triumphant video.
Bill: Ted, it's pointless to have a triumphant video before we even have decent instruments.
Ted: Well how can we have decent instruments when we really don't even know how to play.
Bill: That is why we need Eddie Van Halen.
Ted: And that is why we need a triumphant video.
(Pause)
Both: Excellent. (Air Guitar.)

You see the problem? Sure, tell yourself that you can set up a fan site for peanuts, but the first time it falls over with an "Out of Cheese" error, you have lost your revenue stream. Better hope your cupboard is full of those noodles.

>I was being very conservative when I came up with the 5000 number, any good musician should be able to do 15-20,000 easy

Which end of you did that number get pulled from? I'd like to know before I touch it. Can you provide examples of several non-RIAA bands that have managed to set up fan sites that have 20,000 subscribers at $12 a year? Note "several", because "any good musician". If it's that easy, let's see the examples.

If, as I suspect, you're pulling all this out of your quivering pick ass, and you're living in the aforementioned basement (or otherwise living off of handouts) and have no idea what the phrase "working musician" actually implies, at least have the good grace to acknowledge it.

It should be better than what we have.

[HanzoSan]

Theres two options. One option is to sell the product, I dont really think this would work very well but it would make some money. .50 per mp3 is sometihng people would be willing to pay if you are good, if you arent all that good, .25 per mp3.

Micropayments are an option.

The other option is subscription option, and this is the option I think will ultimately work. If we treat music like we treat TV, and we create channels for certain labels, you can charge someone to subscribe to a channel.

So on your site if you are a channel, you list the price of all your musicians, and combine it up, then offer a subscribe button which a user clicks and makes payment to subscribe.

Once they subscribe for maybe $1-5 a month, the user now can access all the music from that label as long as they pay their fee, or you can charge them for the whole year, charge them around the price of a CD, maybe $15-20, and they can access the music all year.

There should be more than music, this means the whole community, the blogs, the forums, the pictures, video clips, everything you offer and you should offer as much as possible.

Look at AOL, they are king not because they offer the net, we all can get the net, they are king because they offer the features people are willing to pay for, they improve the net experience.

Its your job as a music company to improve the listeners music experience. INNOVATE, dont treat the listener as a sale, treat them as a member.

Re:Use your MP3s for marketing.

[JaredOfEuropa]

"Sell your services, dont sell your mp3s, people want to pay for services not for music. Do what AOL does, dont sell the websites, sell the service, set it up so we have to pay to access the blog, the mp3s, the pictures, and anything else a fan may like, make them pay to access the forum, and use MP3s are just part of the whole package."

Hell no. Stick to your core business: music. Yes, do the rest as well, the blogs, pictures, and so on (I like the ability to obtain CD cover art), perhaps as a premium service for subscribers. But your core business is music: sell that! When I visit the site, I will do so to download music, and I'd be willing to pay for that. If I'd find enough music to interest me, I would take a subscription if it was offered. I might be interested in cover art, artist blogs and video clips, but if I had to pay to access these, I would simply do without them. My advice: offer these additional services for free to hook your customers to your site, and hope that it'll make them buy more music from you.

That said, it's a good idea to set up subscription-type plans, where a user pays a monthly fee for limited or unlimited downloads, ie. charge $0.99 a song, and $15/month for 50 songs each month. Perhaps offer subscribers a few extra services.

Also think about selling download bundles / gift certificates! Ie. an (electronic) gift certificate for 50 songs that you can order and mail to someone else for their birthday. If your current customers like your service, they'll want gift certificates and with those they will do your marketing for you, in a way.

Re:The only thing I would like

[LordBodak]

Although this was obviously meant to be funny, there is also a very insightful point in here.

In the days of vinyl, a record came with all sorts of stuff-- large, often beautiful cover art; liner notes; lyrics; etc.

Nowadays you get a few pictures in a booklet that are barely large enough to see, and only occasionally do you even get lyrics.

The value-added content helped sell LPs; there is no question the lack of it is at least partially responsible for poor CD sales.