the $11.99 figure comes from my thinking that...
-in the end I think all online distribution will cut out is the packaging
cost, so that's the figure I derive minus the packaging.
-you say the it takes less people to employ to run a digital side. I
currently run our entire U.S/Canada operation with 5 people. Most web
sites I know have a lot more working for them. Neither of those 5 people
have anymore time on their hands. To ad digital distribution I would need
to hire more people and essentially become self-distributed (there's a
reason I don't distribute our records directly and it's purely
financial). If I don't do that, I license the right to a company....a
company that needs to also make money to survive (ie. get their cut in
the markup)
-I think generally the digital world is skewed in perception right now.
Most companies seem to have a good deal of private investment, or are
public companies and can afford to operate at a loss for awhile. Once
that dries up and all the web companies need to maintain a revenue stream
then the cost will level back up to the current 'real world' costs (but
yet then I employee twice as many people).
-okay what I didn't factor in is the convenience of 'stock on demand',
but I'm pretty tight with the pressings so I'll give another dollar
off....so $10.99.
Look I could be totally full of shit on this, I don't have any experience
in the web world expect based on what I see now. I can appreciate it from
a marketing standpoint and that it does give us higher visability, and if
100% of my sales become digital than it's all good and easy but until
then it's a lot of financial juggling between the two.
Okay, I'm done now.
Jeff
quoted 54 lines With all due respect, I do not think this is correct. In the macro scope>With all due respect, I do not think this is correct. In the macro scope
>getting your business online nowadays gives benefits from thousands of
>directions and lowers business expenses to impossible minimums. It is a
>general trend and publicly available facts.
>
>Let's look in the music industry using your scale of price content.
>
>Eliminated components: Production costs. Physical distribution. Paying for
>overstock. etc...
>
>Components that remain on the same level are: recording fees, studio costs,
>mastering, print
>ads, tour support, co-ops, promo copies, print media publicity, radio
>publicity, postage.
>
>Componets that are lowered in cost: number of employees (online business
>needs 10 or 20 times less employees to run), office overhead costs,
>management costs, etc.
>
>New components: online ads (can easily be avoided at all or put inside the
>same physical ad budget), web co-ops (can be avoided at all or minimized on
>less costly basis with physcal co-ops, online promos (can be avoided or put
>inside the same physical promos budget).
>
>PLUS: A huge rise in sales due to increased avalability of your products
>which is the most important benefit of online business.
>
>And that's a look from the person who's not involved in music industry (I am
>a financier and involved in online business). If to take into account that
>only 1/3 of CD price is generated by record company... This means that
>digital music can be available less than for 5 bucks minimum. Where is
>figure of $11.99 is generated? Please explain.
>
>Let's just guess how much a record company would benefit if not only a part
>of its business moves online but all physical sales are suspended and
>switched to online... You just have to keep your recording, mixing,
>mastering, etc. phase and then have a couple or more employees responsible
>for sales!!! Other parts of infrastructure like advertising or promoting
>will remain and/or be adapted to online which provides additional
>cost-effective schemes.
>
>this message is pure MHO not intended to hurt anyone but please do not hide
>the truth from us.
>
>take care
>
>Alien
>
>np. MP3's of U-ziq's "In Pine Effect" which is pretty shitty for me in
>comparison to his later works and which I could have bought if not for mp3s!
>God bless MP3.
>
>btw: Ninja is a great label and is not particularly a subject of our
>discussion.
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