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Ouch – the reality of non-payment

by Seb Chan on February 12th, 2008

You’ve read and digested the figures from the big guns – Radiohead and the Nine Inch Nails supported Saul Williams release projects. Radiohead’s payment figures netted them a lot of money (and massive publicity) even if not everyone paid, Trent Reznor and Saul Williams didn’t do so well.

Little German label 2nd Rec whose music I’ve liked quite a lot took a different tack. They sent out, for free, real pressed CDs to addresses in Germany on request. Those who ordered were asked to pay what they wanted to after being made aware of the full costs incurred in recording, making, pressing and delivering the CDs to them.

Johannes reports the results

As of today:
481 CDs were sent out (4 packages came back because they were undeliverable)
127 people paid, which means:

26.62 % chose to pay

The average price paid of those 127 people was:
8.87 Euro for full-length albums
7.95 Euro for the five track EP from Amanda Rogers

While those averages maybe don’t look that bad, this number definitely does:

0.74 Euro

That’s the average for all those 481 CDs we shipped, after substracting the shipping costs. Seventy-four Cents.

Digital works because the marginal costs approach zero – each duplicate copy incurs almost no additional cost other than marginal bandwidth and storage. Real products are different because each copy still incurs significant costs – manufacturing, shipping – on a per unit basis.

The lesson from this, I fear, is that people are pretty much unwilling to pay even the basic costs for physical music anymore and they expect the cost savings of digital to be taken up by labels – even small niche independents.

The bigger independents with established artists can still attract significant premiums on limited edition physical releases as Warp can attest having sold all 1000 copies of the very expensive ‘deluxe’ version of the new upcoming Autechre album in under 12 hours. (They also released the album on Bleep in digital form at the same time with the physical version and standard CD version shipping in March)

From → Politics, Sounds

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