Publishers delay the release of paperback versions of books as a means of price discrimination. ‘Strong’ customer markets pay the premium price for the immediately available hardcover, while ‘weak’ customer markets pay the lower price for the paperback, which is inferior in two ways: less sturdy binding, and you have to wait a year or so to obtain it. This earns more for the publisher than releasing all versions at one time. This strategy is only used where there is a premium attached to immediate access, such as the most popular fiction and non-fiction releases.
Likewise, movie studios make strategic timing decisions for popular feature films, beginning with a release that is exclusively in cinemas – this solves the dual goal of gaining box office revenues from the strong segment of the market that wants to see the film right away, and also is the marketing campaign for the future releases on DVD, pay-per-view, Netflix and the like.
So, I’m not sure why it is seen as so unusual that Taylor Swift is not releasing her new album on Spotify right away. At the Telegraph, Willard Foxton writes:
Other singers – notably Beyonce – have only uploaded their new albums to Spotify months after launch, to prevent the free service from cannibalising sales. No one has ever pulled everything around a new release, though.
From a business perspective, it’s easy to understand why: a million plays of a track on Spotify nets you about £4,000 – better than nothing, but still hardly anything. Swift’s album has been a huge retail smash, selling over 1.2 million copies; if everyone who bought it had listened to it once on Spotify instead, she’d be looking at £400,000 – a fraction of what the album’s sales have delivered.
The release of a massive new album also stimulates sales of your back catalogue – sales that won’t happen if it’s available conveniently and free. Some of Swift’s songs have tens of millions of plays. Clearly, someone at Swift’s label has done the maths and calculated they’ll make more by pulling the tracks than leaving them up.
I’m only surprised that more musicians have not done the same. It doesn’t mean abandoning Spotify forever, but instead using it as a form of downstream sales, like paperback books and DVD’s of movies.
Perhaps a rant seems in order. So Ms. Swift doesn’t want to participate in an experiment that deprives artists of pay for their work. Never mind that she’s part of a mass media industry that allows about 0.001% of artists and their agents to hog the vast majority of the money while most artists live in poverty. Never mind that this industry debases our cultural lives and deprives more serious artists from having a place in society — like say, jazz musicians, a deeply American art form.. Talk about the 1%! And this by addressing the lowest common denominator with the pink-frosted penumbra of teenage dumbassitute. So nice to see her concern about “artists,” but I’m sure she’ll shake it off. Anyway, I hope her handlers (as if she had the sense or maturity to run a mega music industry) time her releases to milk the max from the Wal-Mart public.
I also worry about arts management being based in business schools where a science is made of putting square pegs in round holes. I fear the questions and solutions facing the arts, their management, and their funding in the USA don’t even exist in their universe.
BTW, I’m aware that Ms. Swift gave $100,000 to the Nashville Symphony (and $4 million to the Country Music Hall of Fame.) Unfortunately, our unique and isolated funding system based on largess from the wealthy is exactly our problem, not the solution.
Leaving aside the actions of the .0001%, there is a giant disruption in the form of consumer entitlement to free copyrighted material. My iPhone is a music-stealing machine: to fill it up completely with music would cost me more than $15,000, and I have a low-end model. And capacity continues to increase. We all pay such a fortune — a monthly carve-out that didn’t exist twenty years ago — for access to our digital lives that we feel that we’ve already paid for the content. We can’t help feeling like those zoo patrons who pay $35 to enter — more than $100 for a family — and then wonder why they’re supposed to donate and/or buy a “membership” on top of what seemed a pretty expensive visit.
You can make a case that orchestras and operas and theaters are expensive and therefore need donations plus hefty ticket prices, but it’s much harder to feel okay about buying music or TV programs or films after you’ve invested so much in the equipment and the monthly connection fees for your devices. Plus, you don’t get to see live performers, you don’t have a book or a CD to hold in your hand — all you have are rented electrons. The purchase doesn’t feel very real, nor does the theft. In fact, they feel the same.
Spotify should be a solution but it’s not fair to artists, and maybe it couldn’t be free to the consumer if it paid the artists well. Perhaps a portion of the iPhone and internet fees should be parceled out to the artists whose content we are consuming online; that might be the only way to get fair compensation in their hands.
There will always and forever be another Taylor Swift, and whatever she does might be interesting, but not terribly relevant to the lives of the thousands of other people who create music and offer it to audiences.
To say nothing of the fact that it costs from $100 – 200 billion per year to run the global Internet. See:
http://www.forbes.com/sites/quora/2012/03/14/how-much-does-the-internet-cost-to-run/
It would also be interesting to know how many hundreds of billions of tax dollars went into creating the Internet which is largely a hand-me-down from the military. Think of the enormous costs of research and then creating the massive satellite network, the millions of miles of fiber optic cable often laid with public grants, and on and on. And yet the tax paid by a company like Amazon is only 4.33% of its income. Who’s getting what for free?
Our media industries make billions from the Internet exactly because they have created a system that precludes 99% of artists from participating in it. I’m sure Ms. Swift and her handlers would hate to see that system weakened. I think people really do sense this huge rip off, and that it has taken us back to the day of Abbie Hoffman and “Steal This Book.”