Bob Lefsetz

Moses Supposes

Moses Supposes: Music’s Secret to Competing with “Free” — Raise the Price

Moses Avalon is one of the nation’s leading music-business consultants and artists’-rights advocates and is the author of a top-selling music business reference, Confessions of a Record Producer. More of his articles can be found at www.mosesavalon.com.

Pundits are declaring that, due to so much free music on the web, Amazon’s 69-cent-a-tune program is the ultimate sign of retail music’s demise. But some basic laws of marketing are being ignored within these conclusions. The solution to competing with free might be counter-intuitive: raise its wholesale price. Insanity? Let’s see.

Sometimes it probably seems like I take a contrary position to my fellow music business experts just to stand out. But that’s not true. The truth is that I just read more data than many of them and, therefore, I’m more righter. (Great English, huh?) Such will be the case here as well. For a while, many are saying that now is the time to cut back prices to “compete with free.” I say the opposite. What’s my secret?

History. Looking at history is always more revealing than pontificating about the future. But it does require a bit more research.  History tells us what is likely to happen tomorrow, because even though technology may progress at the speed of a microchip, it still hits the road-bumps of bureaucracy and human nature — a constant often ignored by the “if you build it, they will come,” techno-centric philosophers.

Moses Supposes

Moses Supposes: BS chart of the weak

Moses Avalon is one of the nation’s leading music-business consultants and artists’-rights advocates and is the author of a top-selling music business reference, Confessions of a Record Producer. More of his articles can be found at www.mosesavalon.com.

Boy, it pains me to have to agree with Bob Lefsetz, but his take on this “Chart of the Day” business is on the money.  The chart is pure nonsense. And no, my use of the pun “weak” in the banner is not one of my common misspellings.

For those catching up, a chart on Silicon Alley Insider of unspecific authorship titled “The Death of the Music Industry” has gone viral.  Most of the sites re-posting and re-Tweeting it as “fact,” no surprise, are those that cater to the technology industry. If you’re a reader of mine, you’ll be able to see the flaws in its logic at first glance.  As the tech industry loses its grip on its insidious campaign to devalue music, biased stories of the “dying music biz” become more and more transparent.

In essence, the chart shows the decline in CD shipments and how digital sales have not made up the difference.  Duh. Everyone knows that, but how is a decline in CD unit shipments equal the “death” of an industry that still brings in $10 billion per year domestically, and has been growing in revenue consistently over the past five years (albeit slowly) while everything else in the Western world is falling apart?

ASCAP, BMI, and SESAC all have posted record-breaking revenue year after year, and though it’s true that EMI is headed for the auction block, Universal and Sony don’t seem to be selling their corporate jets anytime soon.

The chart bases its logic by showing a decline in units shipped as reported by the RIAA.  It’s no secret to my readers that not only does RIAA shipping data not demonstrate the entire music-revenue picture, it doesn’t even give you enough pieces of the puzzle to render the outline.  Why?

You want the charts? Here are the charts. (See my chart of the week.)