Paying for Downloaded MP3

I saw a very disturbing publicity for a canadian .99$ cent site, and I was wondering what were your thoughts on the matter.

Personnally, if I knew that particular 0.99$ cent was going straight to the artist, I wouldn't mind.

 

i guess i wouldnt care IF IT WAS GOING TO THE ARTIST. now that would change however if it meant that it was going to someone who did not need the money and would just be getting richer, not caring then i would mind. because even though its not much, the 99 cents could add up for me (well probably not) but even the thousands of 99 cents's that the rich artists get wouldnt do anything and they wouldnt notice/care...
but if it was for a newer artist/could actually matter, then fine. thats why i picked the third option...

 

I voted for #3.

To further clarify how I feel, I believe the songwriter should get their cut as well. Maybe not 50/50 per se, but at least a healthy compensation. As for downloading, I would want to make sure it is a VERY high quality MP3 and none of the 128kps mess. It has to be CD or near-CD quality for me to pay for the download.

 

Once iTunes is available in Canada I will download some tracks from my favorite artist, But I will still download most because in Canada is there is a tax on blank media, over 25$ for 40Gb iPods. That's not cool. The also want to put a tax on all HD, the music industry needs to consentrate less on profit and more on quality.

 

I voted for #2. As an Economics and Political Science guy, I had to.

It's all well and good to say "oh, well, music CAN be found free online, so it SHOULD be free," but that's an inherently flawed argument. You COULD steal just about anything from anywhere with enough planning, but just because this is easier, and essentially a copy, it's somehow different?

Downloading a full version of a CD is going to end up being akin to the shoplifting of that same CD from a store. The only difference being that the store, if you download it, still has their original copy to sell to someone else. Either way, though, the store loses out on the revenue from your unmade purchase and, as that trickles back up the production chain, the artists lose out as well, even if only in the very long run with less legitimate CDs sold.

The sale of licensed mp3s on licensed, legal websites, simply takes the physical CD out of the picture. You are still paying for the music, but you are picking and choosing what you buy, thereby, in theory, decreasing your overall consumer cost to just the songs you want, and perhaps a CD to burn them onto, rather than the ofter "outrageous" costs of store-bought CDs.

However, it still allows the economic process of the situation to function. Prices are still regulated by Demand and Supply (in Supply's case due to bandwidth and production costs for the online distributor) and the money still goes up the chain. Even if the sale of one song doesn't send outright profit to the artist, it sends it to the distributor along with a signal that, yes, they should provide songs from that artist, which in turn gives the artist revenue in the form of licensing fees.

To say it should only benefit the artist is like saying that I'd pay for a copy of Vector Prime *if* I hand my money straight to R.A. Salvatore, but since I can't do that and have to go through a third party, then I say screw it, and I find myself an illegally distributed copy of Vector Prime as an Ebook or something.

As much as we like to have something for nothing, people don't seem to remember thar prices aren't just a means of producers to make profit or an obstacle to us getting what we want. They're also the means of producers to recover costs and thereby continue producing, for supply to be regulated and avoid surpluses and shortages, and the only natural way in our market system to "signal" to the people whose stuff we like to keep making it and to those we don't like to stop wasting resources on crap we don't want.

Music, like any other creative production, is a business, and just because it's easy to copy doesn't mean that the overall economic dynamics of the situation are any different. There's just greater trends towards illegality due to the ease of the act and the diminished chances of being prosecuted, compared to, say, stealing a BMW from a dealership.

 

Wow, Nathan. You took a lot of thought into that post, eh?

 

Nah. An ex-girlfriend / still-friend is a music business major at Belmont in Nashville. We've argued / debated this one dozens of time. (You heard her in Second Strike as Nadix. Imagine Jaren and Nadix arguing ethics.)

Now the big question is, do I actually practice what I preach on this issue?

heh.

 

the store loses out on the revenue from your unmade purchase

Not true. Without the explosion of internet music I wouldn't have bought nearly as many CDs as I would have had I not been able to share music. RIAA is concentrating more on thier profits then the actual art. It's a wake up call, if they don't get that then it's their own fault. I do buy CDs, I have recently got 5 CDs. I don't like buying CDs because they are a totally outdated format, but I care about the artist. The music industry has lost the people that buy a CD for one track that they like, they haven't lost the people that buy an album. RIAA shoudl stop prosecuting end users, they aren't making any friends.

 

Not true.


Absolutely true. The store is the final producer in the chain. THEY lose money if you don't buy CDs. Even if you switch and buy your music only online, the CD store loses money. However, if you download it free, not only does the CD store lose money, but the online MP3 distributor loses money as well.

Now, CD prices are usually considered fairly high. However, consider this:

If it wasn't so easy to GET pirated music, more CDs would be sold and prices would DROP on CDs. The natural equilibrium for the CD market would be lower, as volume would make up for the drop in price, allowing the producer's Supply line to shift "downward," allowing them to be willing and able to produce more because they're making up the costs.

The fact that there are so few people (compared to possible audience) actually buying CDs these days is what keeps the CD prices from falling. The piracy unnaturally disrupts the market. That's why people who buy programs like Final Cut Pro to do video editing pay an INSANE amount of money for it. There's not enough people out there actually BUYING the program, rather than pirating it, to allow the producers to drop their prices. The pirates are getting it free, but the non-pirates are paying more for it, and it's a Supply side issue, which is much harder to correct than a Demand side issue.

If you buy CDs after hearing some songs online, that's different, but that's not what the RIAA is going up against. The RIAA encourages artists to release music on their own websites to get people interested, just like playing the music on the radio, but the only way to end up causing an avalanche into that Supply side problem is to restrict what songs are getting out and ensuring that some songs are licensed-distributor-only.

As for the RIAA concentrating on profit, oh PLEASE. Go there. Please. It's a frelling BUSINESS! Do you think these artists are putting out CDs for the hell of it? No profit, no business, no music. Do you honestly think you would ever have heard of half the groups out there if they were confined to JUST the internet or JUST word of mouth from home? If a new, good group DID emerge, chances are, we wouldn't hear about it in more than the group's home area. It'd become a series of "fads," not a business, and certainly not an industry.

Now, should they prosecute the person downloading rather than the pirate source? That's up for debate. Technically, by law, it's stolen, bootleg property. On the other hand, the law has always focused on the distribution of illegal goods, rather than possession, in all cases except illegal drug trade.

Economically, piracy, carried out with impunity, kills a product market every time. Markets cannot be sustained without prices that at least meet the Zero Profit Theorem of covering accounting and opportunity cost. Otherwise, expect the industry to fold, and no Supply means Demand no longer met. Bye bye product market.

 

Then shall I ask why is it the Music companies don't show us their good will, and loose money on one or two release, but release the CDs at 10$ and under.

because when you look at it, Fallen album of Evanescence for example, it has 11 tracks listed on it, if I downloaded it from puretracks.com, It would cost me 9.90$ CND. But if I want to buy it at HMV or Archambault, I would have to pay 18.99$ CND plus 15.56% taxes.

If I buy it online by amazon, it will come up to 19.93$ (with shipping) before taxes and 22.93$ After taxes...

My point is as follow:
Downloaded music: 9.90$
CD and Case from dollars Store: 1.00$

that's 10.90$ right there... not 23.00$ !!!?!!

Everyone bashes on the Pirates, the Crackers, but what most people don't realize is that they are bashing on the Rebellion!!

IF the record companies were to let me buy a CD for 10$ then I would.. but over 20$ ... for music I will listen too for a while than put it aside..!! I don't think so.

I'd rather still download the music @ 0.99$, and make my own albums with all the tunes I like.

I mean you want to spread aside the market, fine.. can you show me your Microsoft Windows receipt?
If yes, good for you, your rich enough to afford the way to communicate with the world. I could show you mine too. but could I show you the receipt to the 600$ software I use to have fun most of the time!! nope.. why because I can't afford it...
I'm a student, I'd like to express myself and you know have fun a little too. but my wallet is equal to a big O .. We (the youth) are the target clients of the record companies, and yet they don't understand that we have no money to buy their CDs...

Not untill we don't need the CDs anymore...

I feel no compassion for Sony, Bill Gates or other big companies.

But I feel compassion for the Artist who do suffer from these lost.

Now will I be buying myself the Fallen album of Evanescence.. Hell yeah.. because they are worth it even if I haven't listened to their other songs.

in any case.. it's like "stealing" satellite signal, they are showing an ad on TV nowadays and you see a kid stealing a chocolate bar from quick stop, then his father his asking him why did you do it, the kid answer: But dad, you steal satellite signal!...

Come ON!!!!

if the Chocolate bar had been abandonned in the middle of a Parking lot THEN it would have been a good comparison but that is not.

Satellite signal is sent into my face everysecond I stay outside... if I happen to be bright enough to be able to catch it and decode it.. well tough luck.. i've earned it.

I'm not encouraging theft here, I'm just saying this:

Informational and communicational technologies should be free. I should be able to watch what Japanese watch if I'm interested in their culture... how do you think I learned english.. school.. Naaahh it was watching Teenage Mutant Ninja Turtle, The Simpsons, He-Man, GI-Joe, Transformer and all these other show when I was young. That's what gave me the liking for the english language.

Just like watching Anime makes me want to learn japanese.. but I can't afford Neon Genesis Evangelion on DVD because I'm not working..

So sure it's sad for all the big companies but if we were to ACTUALLY OPEN our frontiers, and wrok TOGETHER, then we wouldn't have these stupid wars and these needless and endless discussions about piracy..

Start by supporting the Artists and after that I'll see to buy CDs from big companies.

 

we will be starting to charge for Requiem of the Outcast, but will only accept pictures of Billy Barty dressed in the Princess Leia Slave outfit!

 

Nathan if the big companies focused more on the art and less on the product then we would have better music. To use your own arguement it's the free market. Big companies always want a free market until it starts hurting them.

 

For Kit's comments:

"Nathan if the big companies focused more on the art and less on the product then we would have better music. To use your own arguement it's the free market. Big companies always want a free market until it starts hurting them."

Less on the product and more on the art makes no sense. The art *is* the product. If they focused less on the product, we'd have less selection. Yes, the better groups would survive longer, as tends to be the case now, but if they focused on quality rather than quantity, when really it's the individual groups who control quality, all we'd see is a slicing out of the lower-end groups and a narrowing of the library we get to choose from. And, oh, that's so much better, isn't it?

And to the big companies comment: Big companies are driven by the same thing individuals are, which is profit motive, that is, the seeking of self-interest, measured either by profit or utility. For a company, their best bet is *usually* monopoloy, the price leadership, then free market, so long as they're at the top, but in some cases, even monopolies hurt a company, as once you become that big, your autonomy in pricing vis a vis the market as a whole is gone, and everything you as an individual company do causes changes in the market equilibrium. So saying "they want what's best for them at the time, till it hurts them and then they don't want it" is just fecetious. EVERYONE is like that. You want what's best for you, say a hamburger when you're hungry, until you end up with so much that you want to puke and all of a suddent you don't want it anymore. It's profit motive, pure and simple, same as for any other household or firm (in the household's case, the example would be the Law of Diminishing Marginal Utility).

 

For Sebastien's comments:

Then shall I ask why is it the Music companies don't show us their good will, and loose money on one or two release, but release the CDs at 10$ and under.

Because, economically, that's an idiotic act. Again, it goes back to profit motive. If you know that enough people (say Q) will pay X amount for a product and that X times Q will cover your costs and provide at least a Zero Economic Profit (which is a positive Accounting Profit), then unless they can guarantee that by dropping the price (say to X - Y), they can increase Q by enough (say Q + D) to make up for the price drop and actually gain positive profit, they won't do it. And, frankly, the CD market is a highly inelastic one for those who are buying legally. In other words, it's an inelastic market, meaning that a % decrease in price will lead to a % increase in quanity demanded that is lesser than the price drop, say a 20% price drop for only a 5% quantity demanded gain. In an inelastic market, there is very little economic incentive for companies to lower prices in a market, and the concept of "largese" in economics is laughable. Companies that do things out of the good of their hearts and take it up the arse as a result fail.

My point is as follow:
Downloaded music: 9.90$
CD and Case from dollars Store: 1.00$


Right. But if you download it, you're providing your own physical materials: your own physical CD; jewel case; jewel case inserts; and so forth. That material is part of the production cost for the physical CD company, as is costs to ship the products to them, cost to have them put out on the shelves, etc. To expect that a physical product won't have a higher cost than the electronic version of the same thing, particularly in light of overhead, is flat out economically ignorant.

Everyone bashes on the Pirates, the Crackers, but what most people don't realize is that they are bashing on the Rebellion!!

Y'know, I hate how expensive cars are. Screw it, I'm gonna start stealing the ones I want. Fight the power!

IF the record companies were to let me buy a CD for 10$ then I would.. but over 20$ ... for music I will listen too for a while than put it aside..!! I don't think so.

Then, ya know, guess what! They're not producing it for you. The Supply side of a market is producing for consumption by the Demand side, but to be counted as part of the Demand at all, you have to have both an ability *and* willingness to buy for whatever price the market currently bears. You're not in that group, so, y'know, the market isn't screwing you. You're not PART of it.

The same goes for your example of receipts. It...doesn't...MATTER! You're griping about not having money to pay market prices for something. Congratulations! No one cares because you're NOT part of that market anymore. In ANY market, the firms' Supply is determined by their operating costs, particularly their marginal cost for CDs as they poroduce more, and consumer Demand is borne from the individual trade-offs choices that form the natural tendency to buy less as prices rise and more as prices fall. In any case, those lines and mindsets coincide. At one price, you get everyone willing to pay that price getting the product and every firm willing to sell at that price selling all they put out for sale. If the price is higher than that equilibrium price, you've got a surplus. Lower, you have a shortage. Anyone who would've been willing to pay equilibrium or more, up to the top price needed for a company to sell one item get the product, while those willing or able to pay only a price less than what the market currently bears don't get it. It's the way a free market works and how it answers the fundamental question of "For whom to produce?" (the other two being "What" and "How" to produce, incidentally).

Are we to assume that ANYTHING that is prided higher than a student can afford should be forced to have lower prices or pirated? Pizza is targeted at college students all the time, as are movies and m

 

LOL *Let's get reaaaaady to rummmmmmble*

Funny how some buttons are easy to push eh ^_^

but for the sake of the base arguments, did you knew that for evey sold cd's, only 10 to 20% was going back to the artists...

that's not exactly a good share for beeing:
a) the ones who formed the band
b) the ones who wrote the songs
c) the ones who came up with the demo..

and well you of all people should have a good Idea of how marketing devellopment works.

In any case, I'm not trying to pass Socialist or Communist ideas, I was barelly tipping out the Iceberg of an Utopia.

As you said it yourself, it's always about the Money, take the money away, you take the problems away.

If you want to record a disc, you can if I want to pick it up, I can.

no need for money, no need for trouble.

I'm just saying that.. you know.. our world would be a better place without money.

and I see you coming with the but then everything will go wild argument.. but that still remains to be proven... sur for a while things will be weird, but after a couple of months, when everyone will have what they wanted.. things will calm down.

 

Product = packaging around the music.
Art = the music it self.

 

Product = packaging around the music.
Art = the music it self.

Product = completed item presented from supplier to consumer. The music is an intermediate product that goes toward the final presentation of the item.

A company will *never* support that definition of "art" because it isn't a presented final good, unless you're talking about a concert, rather than a consumer, repeat-use good.

but for the sake of the base arguments, did you knew that for evey sold cd's, only 10 to 20% was going back to the artists...

I'm surprised it's that high. For most products, a stat closer to 5% would actually end up in the hands of any intermediate product producer. That's just part of the process of taking intermediate goods and producing final goods for consumption.

that's not exactly a good share for being:
a) the ones who formed the band
b) the ones who wrote the songs
c) the ones who came up with the demo..

And the bands who want to have a higher percentage can do their own cd production, their own jewel case filling, their own jewel case insert art, etc., as many smaller bands already do. When you push something out that requires numerous different people in different steps of production, you're going to decrease the percentage of any one contributor, no matter how large their part. All the money that the "evil" music company is taking in is going to pay for the resources used in the production of the physical CD product, from all four types of resources, not just the capital (man-made parts). Or do the people who work in the factories to physically put it all together do so just for good karma.

A more realistic statistic would be to note that the artists make 20% in *almost* pure profit from an accounting standpoint, whereas the 80% that would go to the music companies likely only ends up being somewhere around 10% (usually about 1/6 - 1/8, maximum) in Accounting Profit. The bands aren't being screwed, and if they don't like it, they CAN choose a different distribution method or company.

As you said it yourself, it's always about the Money, take the money away, you take the problems away.

No, you take money away, you create a barter society. You increase the number of necessary mutual-good transactions from two (my thing for your money, my money for the thing I want from the other guy) to perhaps dozens. You increase the likelihood of what's called "purchasing power spoilage." And if not using a barter system, you require the use of a central authority to determine who receives what, effectively negating the incentive to work harder or more efficiently. Money, for better or worse, is one of the greatest inventions humanity has managed to come up with.

The idea that the world would be better without some form of object to act as a medium of exchange, measure of value, and store of value, is breathtakingly naive in any economic sense.

 

but for the sake of the base arguments, did you knew that for evey sold cd's, only 10 to 20% was going back to the artists...

I'm surprised it's that high. For most products, a stat closer to 5% would actually end up in the hands of any intermediate product producer. That's just part of the process of taking intermediate goods and producing final goods for consumption.

I used to be a songwriter in Nashville, TN and can speak from experience here. Some of the contracts I signed contained anywhere from 5%-8% depending on the market, record company, experience, etc. I believe, and don't quote me because I never was an artist, that they receive about an equal amount. It just all depends on whether we are talking about a complete CD or just a "song" per se. But I can tell you this, most artists or songwriters that I knew did not receive 10%-20% on their products, unless maybe they owned the record company and they wrote, produced, and sang their own songs.

Where's the real money for artists? Touring.

 

And it should stay that way for a while. Just long enough for me to see some of my favorite groups on tour in Atlanta!

 

By the way, Jay, you said you USED to be in Nashville. Are you still around there now? If so, I'm about 4 hours south of you at any given time in the southern regions of the Atlanta Metro area.

 

Unfortunately not, Nathan. When my wife and I started a family in mid-2002, we just figured it would be easier moving back closer to our families in Arkansas. So, now I am even FURTHER away from ya. But, I do try to make occasional trips back to the Nashville area.

 

Clinton Country.

 

Clinton Country.

Ugh...

 

Why so glum, chum? I hear they got all the disfigured hickerbilly interns you could ever want down there.