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

Price Point

[felonious]

The main problem dogging the Recording industry is price. Price is what the main issue is for most of us. 99 cents or under is a good place to start.

The only thing I would like

[3.5 stripes]

Might be the option to have cd quality files (different format maybe?), maybe for a slightly higher price.

Especially if it's something like ambient music, where hearing everything is important.

Re:The only thing I would like

[angry old man]

I may be just an angry old man, but I have an idea that could revolutionize the digital music industry (patent-pending).

The label could take the highest quality digital version of the music and create analog presses that have near the same quality as the file. In each press, hot vinyl would be pressed to form a high quality analog reproduction of the music (patent-pending). Now, these vinyl *discs* could be packaged in a carboard envelope with printing, lyrics, and etc. Then they are sold. Certain *disc* players would read the music off of these *discs* by dragging a needle across the surface (patent pending) and reading the resulting vibrations.

High fidelity buffs would be impressed with the quality, yet it's still analog which would prevent some piracy since people would prefer the *best* analog reproduction to some digital copy of that analog reproduction. Packaging would turn on people who want something a little extra with their music. Finally, and this is the ingenious part, since this *disc* is read by dragging a needle across the surface, the quality would degrade over time, preventing resale value from gnawing at new *disc* profits (patent-pending).

The ultimate effect of my new music distribution model, is that piracy would come to an end, since the best copy is analog. At most, piracy would be used to sample the music of a particular *disc* prior to purchase. I could revolutionize a piracy filled industry. Recording Labels would grow since they longer have to worry about piracy and digital CDs being reproduced. They could tightly control the distribution of these vinyl *discs* thus controlling their profit.

Music might become thought of as a tangible piece of property with a physical existance rather than some digital idea that is freely copied and shared. (patent-pending)

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.

Quality

[robbieduncan]

The format itself does not really matter (to me). I would prefer AAC, but MP3 is fine. What really matters is that the encoding is at a high enough bit rate and was done well. Correct id3 tags and artwork help too. If format is so important to people you might think about offering multiple formats in the downloads (I'm sure a lot of people around here want ogg).

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.

ugh

[Anonymous Coward]

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').

So now instead of buying an album which includes artwork, booklet, blah blah blah... You have to download the damn things, print them yourself, etc. I'm sorry, but that's too much damn work for me. Plus, the result would look so unprofessional which makes it feel cheap, and I hate cheap.

This is so not the way to go. CD is a fine format. I like having the physical CD, I like having the physical artwork, I like CDs. I don't like the idea of paying money for bits and bytes that represent music.

They should find a way of distributing physical media at lower prices. This is just like books vs "electronic books". You can't beat holding the thing in your hands, placing it in your shelf, looking at your massive collection... But whatever, I guess.

Re:ugh

[lennart78]

I have to agree here. I have quite a large CD collection, and I take pride in that. Maybe I'm old fashioned, but it's a sentiment that you will find among a lot of other people.

Plus, there is the case of the 'limited edition'-CD of course, which will become extinct once distribution is fully digitized.

Buying MP3's off the Net is an option for me if I want an individual track, but not the entire CD. But if I want the full album, I'd prefer a physical disk, with a nice booklet etc...

Re:ugh

[JaredOfEuropa]

"This is so not the way to go."

Don't listen to this guy!! Or rather, do listen to him, and others as well :-)

What I mean to say is that the market for music is rather diverse, and you will probably end up catering to a subset. Yes, some people like physical CDs. If you can manage to let such people select tracks, burn the CD for them, stick in a nicely printed sleeve and ship the physical thing to him for $15, you could capture this part of the market.

But... there are plenty of people (like me) who do not care one bit for the physical product. I have lots of CD's, which I only play in my car stereo that I plan to replace with an MP3 or MiniDisc player anyway. I buy the CD, then rip the songs off it. I play my music from the computer at home. In the car or on the walkman I like to compose my own albums rather than play the prepackaged ones, so I use custom-burned CDs or MiniDiscs.

My point: do a proper market study to find out who your customers actually are, and what they want. I seriously doubt that you will find one "way to go" or that "this is so not the way to go.".

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.

Re:Options

[JamesP]

I guess I am picky sometimes but here goes... 1 - the ability to manage downloads: if the guy loses his connection/ computer hangs/etc when (s)he is downloading and is not able to resume it they will be very p... off Besides, if (s)he has a dial up connection, (s)he will want to download the songs little by little... 2 - Encoding quality. Depending on the kind of music, higher encoding rates (160/192 for MP3)are a must. Example: heavy metal, music with lots of left/right channel division,etc. You may experiment having lower quality samples (32/64 for MP3) for free You may also want to experiment with other formats AAC and OGG are very good even at 128 (almost CD quality) WMA is good but has two problems (IMHO). Closed source (but there are linux players) and quality shifts a lot depending on the kind of music... Another option is to have "golden ears" flac files (more expensive, of course...) Offering the jewel cases is a good idea. I don't think you should charge too much for these (or maybe somthing like: buy the whole CD and you get the picture...)

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.

[Rogerborg]

>5000 people paying $12 a year, is decent money

That's enough to pay for hosting and bandwidth plus two salaries, if they like eating Ramin noodles 3 meals a day. That's Web Guy, who'll we'll charitably assume does the recording and editing, plus a drummer. You'd better hope that you can find 5000 people that like drum solos.

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.

Re:People also want quality features.

[sleeper0]

i worked in the digital music industry for a number of years, including what ended up becoming rhapsody. Here are a few of the things i picked up:

* people will buy mp3's, but not very many people will. Use this knowledge when planning, consider not spending much or any money on putting it together, at least at first, to gauge interest.

* The band's hardest core fans will end up being the ones most likely to buy something from you. However they already own the albums. They may very well be convinced to buy the albums again if you include enough extras. Great extras being unreleased material, live tracks, stuff that didn't make the album, rough tracks from the upcomming album, remixes, instrumental tracks etc.

* This is important: People are (rightly) afraid of losing the mp3's they buy and being SOL. Make sure people who bought the album are allowed to download it again whenever they need it. Some folks may end up overusing this feature in your mind but the good will will go a long way into making people comfortable buying the medium.

* When you buy a cd you get the chance to rip at various bitrates. Make sure you provide a high enough bitrate for high fidelity listening (160k or 192k) but also consider providing a 96kbit or 128kbit set for portable players or other uses. Let them download either or both for one price. (and come back later to get the other one when they need it for free like the last point)

* Provide at least one sample mp3 encoded at the high fidelity bitrate so that people considering a purchase will know exactly what the quality of the encoding is (many bands only provide lower bitrate samples and people may assume the purchased music will sound the same)

* Consider watermarking if you want to be able to tell if the purchased mp3's are being made available on newsgroups/p2p etc or if it is people ripping the album themselves. This can be helpful if a band discovers their music on kazaa and is upset and makes a logical leap to blame the online mp3 sales... Likely they will have ripped it themselves and you'd be able to prove that rather than just speculating.

* (point #1 again) Remember, not many people buy mp3's online. Don't plan to order new computers, bandwidth, software services, spend a ton of time programming, doing art, adding extrasm or marketing until you get a chance to get your feet wet and gauge people's interest.

One thing...

[MartinG]

One thing you really need is some publicity.

A good trick is to cleverly craft and advert for your site and then cunningly present it as an "ask slashdot" question, thereby getting free advertising to huge numbers of people.

I would do something like that if I were you.

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.

Recommended Songs

[jadavis]

Here are two ideas I would like, and would certainly pay for:
(1) A radio like service where I can listen at any time and choose preferences about music type. Then, when I heard something I like, I can save it at high bitrate (higher than the streaming radio, or perhaps even CD quality) for a fixed price with a "one-click" kind of interface. Maybe it could cost a fixed price per month ($5-$10) and then maybe $0.50 - $1.00 per song that I keep. This is obviously the more complicated system, but I think it's just about ideal.

(2) A website where I can sample songs (maybe a part at low bitrate) and get intelligent recommendations. Then I just buy what I want. I would prefer to not have a monthly cost, since sometimes I tire of a service and I don't like to have to go through a cancellation. But, I would be willing to pay up-front (like 5 or 10 songs) and then choose the ones I want later (I know that saves on transaction costs for the merchant).