The Fair Price for Music

By Daniel Neal (TheFirstNutZo)

There is a fine line between ripping off the artist, and ripping off the consumer. On the one hand, an artist is trying to make a living through playing and recording music. On the other hand, listeners want to listen to music for the sake of enjoying the music -- without breaking the bank. I believe that a line can be drawn that is acceptable to both the provider and the buyer, and here's how.

What you are really buying:

What the consumer wants to purchase is the ability to listen to music, how they want to and when they want to. For this reason customers would not purchase a specific song download, they would instead purchase the right to download a specific song. They could download this song as many times as they wanted to, to as many devices as they wanted to, wherever they wanted to. The service would provide the ability to download purchased tracks in ANY bitrate starting with the purchased bitrate and going down from there (if you buy a 256kbps version, you can download the 256kbps, 224kbps, 192kbps, 160kbps, etc.). Moreover you would have the ability to upgrade your purchase bitrate (if you purchase a 256kbps version of a song, you have the option to upgrade to the 320kbps version for the price difference between a 256kbps version and a 320kbps version). You would be able to receive MP3/WAV backup CDs by mail, as well as music CDs of full albums you have purchased (with case inserts) for the additional charge of $5 S/H. Additionally a monthly statement would be sent out, detailing all purchases in a given month, giving the consumer physical documentation of past purchases in the event of a server crash, as well as a yearly statement detailing ALL purchases to date. The yearly statement could be an additional service charge of $5, but the monthly statements would be free of charge. Finally, you would have the ability to transfer tracks to other users free of charge (giving you the ability to sell used track(s) / album(s) / etc.). You would lose all rights to download or recieve backups/albums by mail for the track(s) for the transferred track(s), and the reciever of the transfer would gain all rights to the transferred track(s).

What you are really getting:

All of the files would be unencumbered standard MP3 and WAV files. There would be no DRM or similarly controlling rights management. The files would range in bitrate from 64kbps to 320kbps, in addition to CD-Quality WAV files. All MP3 files would come with complete documentation (full ID3 tags, album art, etc.)

What you are really paying:

The price scheme would be as follows:

WAV - 75.0 cents
MP3-320 - 64.0 cents
MP3-256 - 51.2 cents
MP3-224 - 44.8 cents
MP3-192 - 36.4 cents
MP3-160 - 32.0 cents
MP3-128 - 25.6 cents
MP3-112 - 22.4 cents
MP3-096 - 19.2 cents
MP3-064 - 12.8 cents

The quality given is DIRECTLY proportionate to the price tag. (kbps / 5 = x cents). Since a WAV file has an incredibly high bitrate (~1411kbps) the same scheme would not be acceptable ($2.82/track), so the WAV files would weigh in at a hefty 75 cents. The portions of a cent may seem irrelevant but it can really add up pretty fast. Using this pricing scheme, a 15 track CD would cost:

WAV - $11.25

MP3-320 - $9.60
MP3-256 - $7.68
MP3-224 - $6.72
MP3-192 - $5.46
MP3-160 - $4.80
MP3-128 - $3.84
MP3-112 - $3.36
MP3-096 - $2.88
MP3-064 - $1.92

The beauty of this pricing scheme is that the more you like the music, the higher bitrate you will be willing to pay for. The higher the bitrate (since you are allowed to upgrade to higher bitrates for the difference in price), the more money the artist/distributor gets, and the higher the quality music you get. Because of this, you can sample music in 64/96/112kbps, and if you like it, go ahead and upgrade to a higher quality file. If you don't like it, you are out 12.8-22.4 cents (life goes on).

For artists you already know you like, an additional opportunity would exist for you to cash in on: discount CDs. Sure you can buy individual tracks, but instead you can buy an ENTIRE CD (all songs on the album included) in WAV format for the price of the 256kbps version (a 23.8 cent / track difference)! This gives the seller a guarantee of the entire album being purchased (instead of just a few songs) while at the same time giving die-hard fans a slight benefit as well.

What the artist gets

The artist / distributor agreement would be almost entirely 50/50. On each song or album sale, 50% of the sale would go to the artist (or group), and 50% would go to the distributor. Additional fees charged to customers (the $5 S+H for backups/albums, and the $5 S+H for yearly statements would remain entirely to the distributor. Using my previous 15 track CD example (and saying that it was bought in the discount CD form) the entire album would cost the consumer $7.68. Of that, $3.84 would go to the retailer and $3.84 would go to the artist.

Previewing

Since you are shopping for music with this service, it would be important to get a taste of what your getting. For this reason, Real Media, or Windows Media (or another DRM enabled audio streaming technology) would be used for users to browse through files and take a quick listen to see if it is something they wish to purchase. Ways to browse through files would be (at least) the following: Billboard charts, eras, years, genres, related songs/artists, and most popular.

Just about every music online store have 30 sec. preview which I think it suck. You forgot to mention about composer, not all artist compose their song on their CD (ie Britnet Spears).

Wouldn't work. Three problems:

1. Legally, consumers are buying the right to play a piece of music. The consumers however see things differently. Currently, most consumers arn't intrested in the abstract concept of a license. They pay their money for a silver disc, a box to keep it in, and some papers to decorate that box.

2. If people are able to legally download MP3 files, it would trigger a social change. Copyright would be ignored completly (even more than currrently . People would give away their MP3 files to all their friends. They need some system (not tough DRM, just a minor annoyance) to remind them they shouldn't. For example, the MP3 files could include a new ID3 field which stores a UI of some kind for the computer authorised to play the files. An invalid UI refuses to play. Takes all of thirty seconds with a hex editor to remove the tag to return the file to a normal MP3, but it reminds the customer they arn't supposed to give the files away.

3. Still no solution to micropayment. When a typical purchase is only a few dollars, credit card fees can be a very significent expense. iTunes is spending around 4% of its income on them. Its more than it sounds like.

Yah know...

Copyright is all but ignored here in Japan. You rent a CD in Tsutaya here and they give you a CD-R to burn it to. Just so long as you don't kill anyone everything's hunky-dory.

If it works for Japan...

I still dont see why the Music Industry just dont license the P2P services, making it so people can Share and Download as much as they want. What is so hard to understand about a flat fee. What is so hard to understand about 60 Billion (users) times $5 to $10 monthly fee's? Assuming that there are really 60 billion people out there, thats $300 Billion to $600 Billion a month. Why cant they just do the math?

del5. because the politician hasn't figured how they get there cut yet !!!!

I don't think you've though of all the costs involved. There has to be money to pay the warehouses that store the CD's. There has to be people to package and ship the CD's. There has to be a central location with all of the computer systems in place, and people to maintain those systems. Not to mention a HUGE legal team to make sure evrything is done legally and everyone gets their due share. There would have to be literally thousands of people involved that all need to get paid.

Regardless of whether or not this would work it is right in line with what I will pay for mp3's...I like the option to buy at a low bitrate to hear it then being able to upgrade. Daniel - just let us know when this is all ready to launch

One thing missing from this:

SELECTION!

Will the consumer get to purchase from a vast catalog of every artist, genre, decade, out-of-print songs, demos, mixes, and imports?

...or just have Top 40 crap for the choosing?

Deliriou5 - there are six billion people in the world. You've got your numbers mixed up, I think you mean 60 million not billion.

grEdkilz - I'll rewrite my paper to include that, thanks. Yeah I was seeing it as a COMPLETE collection as far back as we are able to go.

chadt - Think about it, most people (who like albums) are going to go for a lot of the albums that are going to be about 2/3 the price of the current CD. Considering that this is online so you have no retail outlet only a warehouse and a big server cluster with a huge OC-12 or OC48 going into it. As far as the legal team goes, yes it would need to be a relatively large one (as you would need to sign artists directly), but it could be doable. I don't think this sort of pricing scheme is that far fetched.