DiaRIAA logo

Whose Rebellion, Whose Innovation?

Google
 
Web DiaRIAA

P2P Files

P2P the way you want it. Top music hits. One click P2P links. Auto download through TrustyFiles.
Home
Get your own DiaRIAA!
About

Link to Us - Press -
Put our report card on your site

Everybody needs a little DiaRIAA.

Categories, our Hall of Shame & Fame
From customer contempt, public lies, and court convictions to heroes and activists, innovation, and supporting artists.
Essays

Recommend news, an article, or a link
Directory
Links for P2P, news, consumer rights, privacy and security, fun, and more!
Merchandise
TBD
Sponsors
Staff and Volunteers
Donors
$10 recommended. Support DiaRIAA with $1 or $1,000. Donate $25+ to make our Sponsors list, $100+ for the Gold level.

Whose Rebellion, Whose Innovation?: Dynamic Pricing and Music Conversion
By
Feb 4, 2004

DiaRIAA reviews two new digital music offerings.

RIPDIGITAL

RipDigital offers to convert your CD's for about a buck each. Where were they 5 years ago when me and 50 million of my friends were ripping and sharing on Napster? They could have had a booming business back then. Today most consumers have already ripped or downloaded their CD collections, relegating RipDigital to a niche service.

One of the dark secrets of the music business is the revenue fountain of youth. As new formats (8 track, vinyl, CD) become popular, consumers have blindly kept paying retail for the new format for the music they already own (oops, I mean licensed). But digital changes that. And now RipDigital puts a value on it - a buck. It sure beats (re)buying an album download that's $10.

So what's a record producer to do? ... DiaRIAA to the rescue. Imagine a combo audio/data CD or DVD that includes MP3 files. Consumers would be thrilled to have their music in both formats so they could use it where and how they wanted to, and they'd pay extra for it. For the record companies, the dual format provides added value. Finally they could justify the absurdly high price of $15 (or higher) CD's. That extra $5 covers a lot more profit than RipDigital's buck.

MUSIC REBELLION

Music Rebellion features dynamic pricing that adjusts price by demand - the more popular a title, the more expensive. We're skeptical that this will succeed in the long term. Such general eCommerce sites did not survive the Internet crash.

Dynamic pricing works great in the lab as an economic model that increases vendor profit. But there are significant business gaps. Its innovation is limited to this sales technique. It's not a new business process that changes the ecosystem and relationships of artists, producer, distributor, and consumer.

Dynamic pricing disregards consumer behavior. People in general are not receptive to complex purchase schemes. This rebellion is strictly for the record producers.

The application of dynamic pricing will be limited. For large record companies, there is no need to cut prices from retail for popular media. Dynamic pricing becomes interesting at the low end where there's limited demand and thus lower prices, such as for new artists, older releases, and back catalogs . The lower prices are like a consumer discount to encourage purchase.

We don't see any significant opportunities for independents. They already have the flexibility to set their own pricing from free to full label retail. Music Rebellion is an additional sales channel but nothing new.

Dynamic pricing is not a rebellion for the consumer. Its variable price does not touch any of the other factors that consumers value, such as quality, availability, reliability, portability, convenience, etc. Without a big brand or significant differentiator consumers will simply comparison shop Music Rebellion with other online music sites to find the best price.

Still, we welcome Music Rebellion. A diversity of online music sites improves consumer choice and gives artists more options. Independents in particular need creative ways to get exposure and convert fans into cash.

Copyright 2004, Marc Freedman

 


 

Copyright 2003-4 Marc Freedman. All Rights Reserved.

All opinions expressed herein are those of the author unless otherwise noted. This web site at www.diariaa.com is non-commercial satire. It is in no way endorsed, sponsored, or affiliated with RIAA, the Recording Industry Association of America. All trademarks and copyrights mentioned on this site are retained by their respective owners.

Download TopP2P files with TrustyFiles Personal File Sharing software!
The leading multi-network P2P software with Kazaa, Gnutella/2, and Bit Torrent access.
We dare you to compare results!
FREE with NO spyware or added software.
With Personal, Private, Mobile, and Public File Sharing.
Share personal files direct with your friends.
Download files from friends, TopP2P, or multiple networks.
Search for hundreds of millions of files from P2P users.
Blocklist and anti-virus support for security and privacy.