Hello,
Jeff Waye/Ninja Tune wrote:
quoted 6 lines Just to shed some light on the breakdown of a list price....
>
> Just to shed some light on the breakdown of a list price....
>
> -I set domestic CD lists prices as $14.99 not $16.99
> -yes, it does cost $1-$2 in production cost depending on the packaging.
> There is also the recording fees, studio costs, mastering, etc...
This is bullshit. All the fees that you are using to justify have
nothing to do with the actual cost if a record. Your 15 dollar CD costs
about 9-11 dollars from BMG or Sony wholesale, which means that a label
is seeing about 5 dollars per releases(or somewhere in the area, I have
not worked on that side of the business.)
quoted 5 lines -what you're also not factoring in is the cost to market that...print
> -what you're also not factoring in is the cost to market that...print
> ads, tour support, co-ops, promo copies, print media publicity, radio
> publicity, postage, etc...
> -then there's the incidentals...paying for overstock, defects, office
> overhead, etc....
Even these costs have nothing to do with the reason why a CD costs 15
dollars at the store. 2/3rds of the cost of a CD comes from the
distributor and the record store, it has nothing to do with the label
itself. Do not lie to these people, because I know there is no way in
hell that you are getting $10 a unit from your distributor. The people
who are screwing consumers are the distributors. There is no reason a CD
should cost more than a cassette tape. Cd's are expensive because of
greed, plain and simple.
quoted 2 lines -when you put it all together is equals a pretty significant amount per
> -when you put it all together is equals a pretty significant amount per
> CD.
not really, you have been doing it on what, 5 dollars a unit or so all
this time.
quoted 6 lines -people argue right now that online distribution of MP3 sales eliminates
> -people argue right now that online distribution of MP3 sales eliminates
> a lot of those costs and makes it cheaper. That would be marginally
> correct for now, but if it takes off as a viable revenue source, then on
> top of my expenses now, I ad the following....hiring additional employees
> to take care of on-line business, advertising on the web, co-ops with web
> companies, more promos sent to online media and radio....
and once again this is bullshit. If you are pricing at the rate that
your distributor is giving you I can see this, but you will not be doing
that. If you charge $8-9 per unit, you are doubling your revenue per
unit, as well as knocking off 2 dollars per unit for pressing costs. So
it seems to me that your revenue would grow 70% by going to a
downloadable format, and cutting out retailers and distributors,
while(shockingly enough) reducing your price to the consumer by more
than 33%
if you are into business newspeak, it is what they call
"disintermediation" a simple way to say it is: as a business we have
figured out that we can make more money and sell our product cheaper to
the consumer if we can cut out the two unnecessary tiers of the previous
distribution scheme. Ford and GM are in the process of doing it with
cars, and no matter how many excuses are made or lies told, you will be
doing it with digital audio.
quoted 6 lines -essentially what I'm getting at is that the digital world will become
> -essentially what I'm getting at is that the digital world will become
> just as expensive as the real world to sell records in, and maybe it will
> level out to be about $11.99 a record but you don't get the packaging.
> Also that's assuming my CD's sales hold steady and that I don't need to
> factor in lost revenue on that side of the business. I'd pay the extra $3
> for the packaging anyday.
and this is where you come in as a label, in the future there are going
to be two formats: Digital Audio and Boutique packaging. The only way
you will be able to justify the pricing of a physical audio format will
be to have elaborate packaging. Frankly, I will not buy CD's anymore if
vinyl is available. I hate the format, I think it has all but destroyed
lable art, and it is a shitty audio standard to begin with. As far as I
am concerned, I am getting screwed by this poor container for digital
audio. I don't want to pay 6 more bucks for some crappy little post card
art and an ugly little case. I will buy vinyl, with great label art, and
if I know I am going to play the hell out of something, I will burn an
extra copy for repeated listening.
quoted 8 lines also, don't seperate the artist with the industry. Any artist wanting to
>
> also, don't seperate the artist with the industry. Any artist wanting to
> make a living off their music is part of the industry. So the argument
> that we're only fucking the 'industry' when downloading material doesn't
> work. The artist revenue comes from the label, so when 'fucking' the
> label/industry you are in fact also fucking the signed artist. Even if
> said artist is stuck in a shitty deal it just makes it an even more
> shitty deal when their marginal income is taxed even heavier.
perhaps, but if you are dumb enough to get into a position like that you
get what you deserve.
quoted 13 lines To the person asking about whether indie artist normally get a better
>
> To the person asking about whether indie artist normally get a better
> rate then major....mostly yes. Most indie labels I know either give 50/50
> split on profit or give approximatly 20% of the distributor price with no
> recoupables. Plus there's also mechanicals and publishing income paid out
> to artists. Typically if you're on a major selling an okay amount of
> records, ie. say 20 000, then you're probably not seeing alot of money.
> If you're on a major selling 250 000 copies you're probably doing okay
> unless you just grossly mis-managed your career. If you're on an indie
> with a good deal/smart label (financially) and selling 20 000 copies your
> probably doing just fine, not rich by any stretch, but probably quite
> comfortable....and after all, any sane person only wants a roof over
> their head, some good food, and money to buy more records.
You are right on the indie tip, but you are dead wrong about the Majors.
If you sell 20,000 records, you are getting nothing and you are probably
in debt up to your ears.
A quarter million, you might be breaking even, you might eat if you sell
your publishing. These days gold records are not even enough for the
majors. The Major label system has changed since the CD. They don't
develop artists anymore, they delete back catalogs after they drop below
a sales figure, and they still do not pay anything. Unless you are Aphex
Twin and you have the leverage to negotiate a decent deal, there is no
reason to be on a major. 12 points minus recoupables isn't worth it,
especially if you are not making radio music. You might be treating your
artist pretty good at Ninja Tune, but Universal/MCA isn't treating their
artists too well.
look around on the internet, there are plenty of articles talking about
how bad the business practices of major labels are, look around. Chunk
D. will be glad to talk at length about it. It is not a secret, this
current business strategy does not work for the artist and that is going
to have to change.
mt
--
Michael Taylor : Chrome3@ix.netcom.com
http://homes.arealcity.com/Intermodal/index.html
http://www.mp3.com/TheMSProject
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