How much should music cost?

This has long been a discussion among my peers and the industry in general.  $0.99?  $0.00?  $9.99/album?  $1.99/album?  All of these prices are being tried now in various guises (OK Computer was $1.99 this week at’s MP3 store).

There are very smart people conjecturing on the various benefits of each price point.  Terry McBride in a recent must-read paper for UK Media studies group MusicTank posited that $0.25 was a “sweet spot” – a position he described as a price that would draw just enough of current P2P users to legal, paid-for services to increase the volume of paid-for downloads enough to significantly increase incoming revenue for artists and labels.

Then came this piece in the LA Times – it comes on the back of Universal pulling the album of their artist Estelle off of iTunes in an attempt to create scarcity.  Estelle is one of those artists who’s single is more important than the album – and just like the old days – Universal wants customers to buy the whole album, not just the single.  As an alternative to pulling the album, The Times piece suggests that labels should raise the price of the single to $1.99.

So which is it?

What I have to agree with is that the inflexibility that iTunes holds on price (i.e. ONLY $0.99/track) is damaging to all parties here – customers, artists and labels.  The closest thing to real price elasticity is AmazonMP3 allowing this kind of radical price experimentation (see the Radiohead classic album for $1.99 above), and so might be the closest thing to a real test of Terry McBride’s pricing suggestions.

Personally, I have to lean toward Terry’s idea of the $0.25 track – unless you’re a major label act like Estelle, you’ve no need to try and play the artificial scarcity game, even with the particular challenges that offering cheap, or even free, music presents.

So what do you think?  What’s a reasonable per-track price in your world?


9 Responses to How much should music cost?

  1. Shaze says:

    Music in it’s purest forms should be free. You can charge for someone putting together a nice venue to listen to it, or maybe charge for a copy of a recording;but I have a hard time justifying any price for data. All information can be shared for free because of the internet, so why should music be expected to harbor any guilt from the consumer? The internet is here, people will share data, for free; get used to it.

  2. I’ve no problem with free music – none at all. In fact, free music is an essential part of any new music business plan, and I personally have difficulty with the concept of people paying for 1s&0s. I certainly don’t feel there should be any guilt involved in acquiring music for free.

    But as it stands, there are a LOT of people who still pay for music. The real discussion here is how to increase this number by pricing as competitvely as possible.

    In that sense, what’s the most you’d pay for an MP3, assuming you’d pay anything? (and of course, paying nothing is fine too…no guilt here)

  3. aaronzimmer says:

    I’m still (occasionally) buying stuff from iTunes. If its music that I really want I’ll pay about anything for it…..99cents a track at iTunes or $18 for the physical disc at Virgin.

    I get a lot of free stuff too. So, I guess it depends. I would certainly buy a LOT more stuff at iTunes for .25 per song.

    It’ll be interesting to see where the value of music and record labels land. I make a (meager) living as a musician here in NYC. I suppose we’ve had it lucky…but I like the idea of trying to use my music to sell OTHER things.

    Great blog, by the way…glad I found ya!


  4. fidgetrainbowtree says:

    I like my free music, to introduce me to a band, however, I’d rather pay and know that SOME of the music is going to the band, rather than rip them off. My friends who are in fairly successful bands still get most of their money from touring rather than record sales though.

    However, I think now, that music is generally downloaded rather than purchased as a ‘hard copy’ perhaps the prices should be lower. In the UK we pay £0.75 per download on iTunes. I think that’s an ok price, but for my ‘favourite’ bands, I’d rather still buy the hard copy as I’ll get the extra tracks as well.

  5. […] trail started at Reddit or some such site, and got to LA via Penny Distribution and Coolfer. It includes arguments that the price of a single should be more than the standard […]

  6. Karmafan says:

    With the Internet helping in drastically reducing costs of distributing music – if not making it absolutely free – music and digital arts should be available free of cost for fans. It only helps musicians that more and more people listen to their tunes, use their graphics, read their freely downloadable books.

    So how do musicians and artists make a living? We at Karmafan believe it has to be patronage. Give away music, let fans support you, further let fans show off to their friends that they have supported you. We think such a model completes the circle.

    Would love to hear what people here think.

  7. @aaronzimmer the article certainly brings up what you mention about paying anything for the music you really want – the LA Times piece calls it “price insensitivity” – and it’s something I’d never really thought of before. I’ll be bearing it in mind for future releases by Penny Distribution for sure. Of course what I neglected to mention in the original post is that there IS another service that’s offering downloads for around $0.25/song – it’s called eMusic. And I use it ALL the time.

    @fidgetrainbowtree I think the “extra tracks” thing is a great way to entice customers to buy your music – it’s a version of the “Freemium”, where initial purchase is free but additional items will cost – and the idea has a lot of miles. At the low end of the indie spectrum, generating interest in your music is paramount, so I don’t think you can afford NOT to give your music away.

    @karmafan I’m wary of attaching any ONE method of remuneration as “the answer”. Certainly, patronage is a great way of generating good will and should absolutley be PART of a music strategy of any band. But as I argued in a recent presentation at Barcamp Belfast, it’ll be a mixture of the variety of monetization models such as people paying for downloads, co-branding, sponsorship, licensing AND patronage that’ll ultimately bring an artist financial independence. I likened it to making a cake – it’s about finding the right ingredients for your specific situation and balancing them out to make the perfect model for YOU.

    You can download the powerpoint from that talk here, if you’re interested. –

  8. Eddie says:

    as long as its 320 kbps mp3, I would pay $.40 a song. ie. an average length album for $4. I do buy from iTunes, but its limitations sometimes annoy me.

    I tried emusic way back when, wasn’t sold on it.

  9. Eddie says:

    not a bad wee presentation btw…

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