Another song I loved by an artist I loved was available for sale, but on a tiny third-party music distribution site I'd never heard of, and for $1.50. $1.50 is a lot to pay for a song
And then OP wonders why everyone is making free services plastered with ads instead of charging.
"It is difficult to get a man to understand something when his salary depends upon his not understanding it.” – Upton Sinclair
You're putting all the responsibility on the consumer, and none on us, the technologists, the so-called innovators. Where are our innovative powers to come up with alternate busniness models? Where are our backbones to stand up against selling out the internet so that we can get rich quick?
Because that is what the advertising business model is: a get rich quick scheme. Undercut the straight up competitors that charge for their product by fooling consumers into thinking you're offering what the other guy is offering, but for free. Come on, who could turn down that?
Only the truth is it isn't free. We all pay in the end. The lunch is not only not free, it's costing us more and its loaded with toxic crap.
The saddest thing about Hacker News is that we all get behind radical things like FOSS (Bill Gates called it un-American) and Snowden[1], and fight SOPA and NSA violations of privacy, but because too many of our salaries depend on advertising revenue, our cognitive dissonance blinders go up lightning fast. You can already see it in the top comments to this post.
Admittedly I suck as a writer, but ever time I make my very strong case that advertising may be the primary evil of internet[2], I almost invariably receive a great number of silent downvotes. No one solidly counters my arguments, except to fall back on the utter bullshit that that advertising is great because it gives us the internet for free, which proves that they didn’t even read my argument.
Boykis is wrong in saying that things were fine in 2012. No, they were bad then, and the internet's original sin, relying on advertising, started long before that. It’s only that now it is accelerating toward a crescendo. It will get worse unless we do something about it.
I find comments like this to be sorta akin to putting your fingers in your ears and screaming "lalalalala I can't hear you!".
Whenever people say "free" in the context of information exchange, my belief is that they fundamentally misunderstand the nature of information. Information is a proxy for power, and the power comes from asymmetry. If everyone has a level playing field from an information access perspective, you cease to have functioning markets of exchange. The essential point of business is information arbitrage (I know something you don't know so I can buy low and sell high) and free access to information is antithetical to that view.
In short, everyone remembers the first half of that quote: "information wants to be free..." but conveniently forgets the second part: "... But information also wants to be expensive".
There is no "free exchange of information". It is always subsidized by the rich and powerful (no part of the internet's infrastructure is "free" and therefore any "free" exchange of information is a form of charity).
That is to say, it's hard for me to tell people to give up the information which is, in effect, their livelihood.
> "There have to be other business models that free up the internet for what it was meant for: free exchange of information.”
I'm with you. People need to get paid.
I'm only calling for coming up with better business models or go back to the straight up "charge for it" model that the free market system is built on. The bit about "free up the internet for what it was meant for: free exchange of information" is not my point, though we do need to come up with a business model that gets people paid but also let's the information that is the lifeblood of democracy flow freely to all people regardless of ability to pay. You focused on a red herring (though it was my fault to put it there, and I've deleted it, thank you). Now please address my points about the ills of advertising.
(P.S. We'll leave to another day the question of whether "It is always subsidized by the rich and powerful" or whether the rich and powerful are in fact subsidized by the people at the bottom, whom you consider the recipients of "charity".)
Advertising is the worst model, except for all the rest of them.
Charging for things, in and of itself, is hard and, on some level, facetious. If all knowledge were known, why would you pay anyone to do anything? It's not clear to me why anyone pays anyone except in the case of information arbitrage. Advertising is a form of explicit information arbitrage, where we convert dollars into attention. Other information arbitrage's include licensing, where we essentially leverage the properties of intellectual property and technical obfuscation to generate returns.
The ills of advertising are a consequence of information arbitrage. What most people are railing against is the act of arbitraging what they view as trivial information, and yet this is the essential point that makes a business.
We think advertising is evil because it monetizes our attention in a vaguely non-consensual manner, but there are tons of businesses which are valued with respect to attention that are not valued with respect to dollars (think porn as the canonical example). Advertising is simply the easiest way to convert attention into dollars. There are higher friction methods, but their returns are generally commensurately lower.
If I could just reach into your bank account and pull a penny out for every minute you use my app, or listen to my song, or read my book, that might be a viable business. Barring that access, advertising appears to be best.
Dude, you don't really make much sense with all that reductionist gobbledygook. You're quite hung up on the concept of "information arbitrage" in your numerous replies on this thread. You almost come off as a troll but I can see you're serious.
There is more to life than "information arbitrage". You cannot reduce people and society to transactions. Get out of your green-ivory tower. Arbitrage the asymmetry between your theories and reality by living a little. Maybe get laid. But if you reduce that too to some sort of arbitrage, you probably won't, unless you're paying for it, which only reinforces your world view.
> I find comments like this to be sorta akin to putting your fingers in your ears and screaming "lalalalala I can't hear you!".
2) Relationships between people are also a study in information arbitrage as the power dynamics between two individuals are never equal unless both parties have intentionally decided to make them equal.
3) If you think the world of business is governed by some other form of arbitrage, please put your theory forward. If you think the world is not governed by arbitrage, please tell me what governs the world.
It is not reductionist, it is an attempt at distillation. Reductionist would be to ignore the pertinent facts of the discussion.
>everyone remembers the first half of that quote: "information wants to be free..." //
You appear to have the quote wrong and the intent of the quote wrong too?
Wikipedia has it as from Stewart Brand, supporting the freeing of information:
>"On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other." (Brand 1984, via Wikipedia) //
It's saying that information is valuable and so in a way it should be expensive but as we now have ways of distributing that information for little cost we can make the information free-libre and virtually free-gratis. Some people want to make the information expensive, so they alone can profit; others want to make the information free so that all of mankind can benefit.
>That is to say, it's hard for me to tell people to give up the information which is, in effect, their livelihood. //
To me all of this, and the way industrialisation is heading, leads to a need to re-evaluate the structure of society and the way we process and share resources (physical and otherwise). But that's not a reason not to go there, unless you wish to retain the current system where - as you note - it benefits a small minority to keep useful information from others.
Stallman apparently puts it this way:
>"I believe that all generally useful information should be free. By 'free' I am not referring to price, but rather to the freedom to copy the information and to adapt it to one's own uses... When information is generally useful, redistributing it makes humanity wealthier no matter who is distributing and no matter who is receiving." (Stallman, Comp. Sec. Conf 1990) //
I am firmly in the camp that wants additional information dissemination, but I am also in the business of understanding why this is hard. I do see knowledge as one of the few universal equalizers, but I recognize, simultaneously, why invested power structures want to protect their advantages.
I agree that current economic paradigms require rethinking, but, short of additional taxation and subsidization, I don't see how we're going to achieve any semblance of novelty in economics.
The Internet infrastructure has nothing to do with what we are talking about. You actually pay for the infrastructure monthly to your ISP.
Also, your understanding of the point of a business is really flawed. Everyone can have perfect information and businesses can still function just fine. I continue to pay restaurants for food even though I know they are making a profit off me. I do business with businesses that provide value to me. It doesn't have anything to do with whether or not they have secrets.
>The Internet infrastructure has nothing to do with what we are talking about. You actually pay for the infrastructure monthly to your ISP.
Actually, your tax dollars for the last 40+ years subsidized the internet and you now pay your ISP because of their ability to leverage regulatory arbitrage against you. Their secret is their ability to get governments to give them money for delivering services that they then charge exorbitant fees for; it's a good game.
If you look at the cost structures of the networks in contrast to the tax dollars subsidizing them, you'll realize that the networks were basically paid for by the citizens and operated privately at a profit. Here's a good book on the subject: http://www.amazon.com/Broadbandits-Inside-Billion-Telecom-He...
>Also, your understanding of the point of a business is really flawed. Everyone can have perfect information and businesses can still function just fine. I continue to pay restaurants for food even though I know they are making a profit off me.
Sure, you definitely pay people for services where you are aware they are making a profit, but the reason those services make a profit is secrets: knowing where the best sources of meat come from, the best vegetables, the vendors who show up on time etc. All businesses have secrets.
And no, we cannot simultaneously have perfect information exchange and functioning markets. You might have microcosms of functionality, but the global economy would cease to function. Lots of deals are dependent upon one side believing the other side is not cheating them. With perfect information, all of those secrets would be revealed and the consequences would be unpredictable at best and dire at worst.
Ugh, no! It's not because they know the best places to get meat, etc. When I cook at home I can make better meals than most restaurants I go to. I pay them because they do the damn work for me!
There are some businesses where secrets matter, but the vast majority are just in existence because they have infrastructure setup to do things cheaper/faster than you could yourself.
I think you should expand your view. You are only taking into account the service aspects of the business and not supply chain or other very important details (like location).
All businesses have secrets and they matter. The cheaper/faster portion of the business is a form of information arbitrage. Cheers.
> If everyone has a level playing field from an information access perspective, you cease to have functioning markets of exchange. The essential point of business is information arbitrage...
This is a brilliant insight!
Still, we are in a sufficiently connected world that the balance is shifting from businesses having the higher value information about the cost to deliver a service and the consumer having immediate access to information about competitors and the relative value being offered. The cost of that information for consumers is diminishing and creating new market opportunities (i.e. an uber driver knowing where to go to find a paying customer...which greatly expanded the actual market size.)
All this is to say... That while businesses thrive on information assymetry, those that can find a way to even the playing field will expand markets and create much bigger opportunity than those that try to sell the information for ads or subscriptions.
The users post is a clear monetization path for soundcloud. Sell the downloads and own a piece of the transaction... Like uber does and like Google is trying to do with their buy buttons and comparison ads.
> [U]s, the technologists, the so-called innovators. Where are our innovative powers to come up with alternate busniness models?
Well, we're technologists. Our innovative powers are good for coming up with technological solutions, but this is a business and social problem. Our ability to solve those problems are no better than anyone else's—worse, probably, given our focus on problems with very different constraints.
Exactly. What I took away from this article is that, despite everyone being frustrated by the inoculation of ads into our beloved 'free' services, we are still not frustrated enough to actually pay the premium to eliminate these annoyances. It's the old cliche, "you can't have your cake and eat it too".
Or it says that there's an untapped opportunity for low friction, micro-transactions instead of "ads" or full-fledged purchases on unknown websites.
It's clear by now that ads are for lazy. If your plan is to monetize your site with ads, today just like 10 years ago, you lost.
Edit: surprised by the negativity on her reaction for _hacker_news. She's rebuffed by the $ and time investment for a single song ("unknown website, takes time to create an account, multiply by times she wants to buy a song). As she says:
> and not enough to pay to risk giving my credit card to an unknown third party.
The UX challenged has been solved, though; there are multiple well known websites selling music and which allow you to bundle all songs in a single order. You just can't force the artist to use them.
Yes and no - streaming and iTunes are pretty good for most things "mainstream" music. Soundcloud though: there's no excuse for them at least not to _try_. Just like for her, ads and passive aggressive song selection are killing the experience.
Then for content at large, there's pretty much everything to do. Not surprised if Stripe and ApplePay, both focused on this micro-amount market, take it all.
Microtransactions have a minimum mental cost to the user. This is why even the services that could track your actual consumption and bill you to the penny don't.
If micro transactions break into public awareness it might get significantly better. There could be a joint meter app like mint to track usage. You could just sort by a few things like recent cash flow and trivially manage your transactions at scale. Transactions should be tied directly to user level constructs like playing a song or a period of time in a game. These should have consistent costs so that the user can form reasonable expectations without needing to sign off on every transaction. You don't think about how much water costs every time you use the faucet but you're aware enough not to just leave it on. That's the only mental cost that's ultimately necessary.
I've been thinking about an idea that would solve this for bloggers and other small-time publishers: Readers subscribe to a federation of publishers for, say, 10 or 20 dollars a month. They now get to consume as much as they want on those sites.
After they read an article, they can click either a "worth it", "meh" or "garbage" button. At the end of the month, all subscription fees are distributed to each publisher proportional to their "worth it" votes. This will drive up quality. If "garbage" votes are penalized, it will discourage bad content as well as link-baiting, dishonest titles or any other gaming of traffic.
> Readers subscribe to a federation of publishers for, say, 10 or 20 dollars a month. They now get to consume as much as they want on those sites.
Federation isn't a very catchy name. Maybe you can think of it as a bunch of strings, all wound together. Like a cord, or... or like a Cable! Yeah, call it "Cable".
Exactly. Except that this supposed ratings system could potentially have a bigger impact on quality than the cable model, though I'm not entirely convinced.
I assume most channels make their income almost entirely off of advertisers, and channels which are not watched as frequently are presumably not paid as much. In the proposed system I would assume the idea is to decrease/remove advertising and content providers would be given a share of the revenue based on user ratings? Seems interesting, but probably not terribly practical. It seems this could devolve into clickbait hell pretty quickly.
> The garbage rating actually penalizes clickbait further.
But the reason that clickbait works, is that people like clickbait. So I'm not sure you'd get much success with getting people to rate them "garbage" when they like them. Sure, maybe not en masse, but on an article-by-article level, people do like clickbait.
> But the reason that clickbait works, is that people like clickbait.
No, the reason that clickbait works is because the clickbait itself (which is the thing which is presented before you click the link) looks like something that the user is likely-enough to like that they are willing to click it to find out.
The whole reason that its called clickbait is that that impression is often deceptive. So, getting feedback of the quality of the target of clickbait links would be potentially useful in weeding out the garbage.
> No, the reason that clickbait works is because the clickbait itself (which is the thing which is presented before you click the link) looks like something that the user is likely-enough to like that they are willing to click it to find out.
I think at this point if a user clicks on a link titled "12 Best Disney Princesses", they know exactly what they're going to get—and they click on it, because that's what they want to see.
In 2015, sometimes it feels like the best example of modern journalism is Buzzfeed. Go to any journalism conference, and their logo will be on many, many slides. As a journalist today you might feel that it’s more valued to write clickbaity headlines than to write pieces of well-researched journalism. But, Buzzfeed doesn’t work if people need to pay per article.
At Blendle we see this every day. Gossip magazines, for example, get much higher refund percentages than average (some up to 50% of purchases), as some of them are basically clickbait in print. People will only pay for content they find worth their money. So in Blendle, only quality journalism starts trending.
Sure, but the level of responsibility required by the user as a curator doesn't seem like it would hold past a critical mass. The insane amount of reposts that Buzzfeed-esque garbage gets just isn't all that encouraging to me. Short of the decidedly undemocratic method of only counting a certain group of users' ratings, I'm just not confident it would change things at scale.
We can all handle 3 or 4 subscriptions. The dollar amount I came up with was an example. A small federation might charge $1. The invisible hand of the free market decides. The federation would fail if it charged more than the amount of good content it produced. An author could also syndicate her/his content to more than one federation.
If we're not willing to pay for good content, i.e. the writer's livelihood, then we're all fucked. If you read my other comment herein[1], you'd know we're all paying anyway, even though we are fooled into thinking it is free.
I'm willing to pay for good content. But I also live in a place where a good software developer (net) salary is €14k/year, and that's still much higher than the average national salary, so I'm wary of these subscription services. They usually end up with a single price (since geo restrictions work poorly on the web), which the invisible hand pushes up to accommodate the disposable income of wealthier places.
As bad as advertisement is, it still helped subsidize my reading when I couldn't afford to pay for it, while the subscription model would create a tiered Internet for the more and less well-off.
So would you be in favor of the advertising business model for books? All books would be free, but there would be ads on the cover and interspersed throughout the book, sometimes on separate pages, sometimes in boxes between paragraphs. There would be product placements, as well as “native ads” which appear to be integral chapters of the book.
What if authors who refused ads just couldn’t compete against the deluge of free books?
What if books had a way of tracking who read them, and this previously private information was sold on the information markets?
Ehh… no. The subscribers in the ring would only be gaming its own payments, no one else's. They'd be paying themselves, less the federation's operating fees.
The part that stuck out to me was when the author talked about her desire to have a long-term archive of her favorite music, but wasn't willing to "wait for 2 days for a CD to ship". I can understand not wanting to deal with CDs or not wanting to spend money on less-favorite songs on the album, but focusing on the delay just doesn't click for me.
If the only way you could get to Hacker News was over a dial-up connection, would you switch to dial-up or would you just go to a different site that loads a broadband speed?
Waiting two days to then have to deal with the unpleasant experience of getting a physical CD sucks. Wait two days, then rip the CD, then move the file to your phone... or just find other music you like that can be immediately downloaded. I love music but there are very few individual songs I would do that for.
I've done that with my entire music collection. I have only ever bought one MP3 in my entire life. The rest of it is ripped from the CDs that I have bought. If the artist has gone to the effort of recording, mixing, mastering and designing sleeve notes and documenting who took part in the process, then that's really something worth buying.
If we only consider music to be as valuable as background white noise, then downloading it without the associated archive of data is probably worth it. But I think the entire process is worth more, which is why I'll buy it and wait the "forever" of 2 days for a CD to arrive.
I can't believe people consider 2 days for postage for a CD to be a long time. Is this a generation of "I want it NOW NOW NOW NOW" that I am surrounded with?
It's a generation with a deeply internalized notion of opportunity cost. That and given most people care primarily about the actual music the ratio in effort to ship/rip a cd versus download a torrent is enormous.
I'll usually buy CDs at shows (since I assume more money goes to the artist), or when an artist just doesn't sell digital copies (e.g., Ladybaby).
But okay, I look at the pretty artwork once, I wonder at what exactly a producer does, and then I never, ever look at that stuff again. I buy the CD for mostly the music, which I consume via my ears.
I've literally got a stack of CDs that I purchased to get artists' music, and only keep them around for sentimental purposes. If the cats eat them all tomorrow, I'd be vaguely bummed out, but I honestly don't think they've even seen a CD laser since I ripped them the first time.
It’s two days if you live in the US. I don’t, so the CD will have to travel for weeks to finally get stuck at the customs in the airport—and CDs are much more fragile than MP3s or FLACs. Moreover, I don‘t have a single device to put this CD into.
Sure, but the author was talking about being worried about long-term access to her favorite songs. I think she said that soundcloud still has most or all of them right now: the next two days are presumably not the big concern here. If she wanted a constant stream of curated but non-specific new material, I agree that that would be a different issue.
I wonder if people give thought to the length of time it takes to learn an instrument, play it well, learn the recording process, record it well, learn the mixing process, mix it well, learn the mastering process, master it well etc. if they are willing to dismiss $1.50 as expensive for a song.
In comparison, how much is a cup of coffee or a portion of chips (for us UK types)?
How much is a trip to the cinema?
It shouldn't be a race to the bottom. If you want bargain-barrel prices, you'll get bargain-barrel quality too.
I don't think you can honestly rationalise it like that.
You could similarly rationalise selling an iPad for $2,000 by 'We have a bajillion engineers, who all went to top schools after decades of non-stop education, who worked 80 hour weeks to refine every single component of this, who tested 100 different chamfers for this edge, who polished it, who ...'
The price of something should absolutely be dictated by how much the target market is willing to pay for it (and that includes ease of purchase etc) - otherwise people simply won't pay. For music, that is one of the reasons why you have so many people whining about how much piracy there is; their target market simply doesn't think that their music is worth the amount they want to charge it for.
The consumers may be incorrect, but it doesn't change the fact that the sales will be smaller because of this.
Music is frequently expensive to produce, but the sale price is largely independent of that. If you consider production costs alone, an orchestral recording should cost many times that of a band, due to its many times greater investment (an orchestral musician will be vastly more technically talented (after 2+ unpaid hours of practice per day for all but a few years of their life) than almost any band musician) and smaller market.
Meanwhile a live recording should cost almost nothing, as it can be produced simultaneously (and frequently is) released immediately after the gig.
The price is the same, because that's roughly what people are willing to spend on music.
I always thought that the initial 99¢ per song in iTunes was partly influenced by the fact that people usually give $1 bills to street musicians (at least so they do here in NYC).
If you can pay 100¢ for a 3-4 minutes of street performance, can't you pay 99¢ (or less) for 3-4 minutes of a high-quality recording which you can listen to as much as you like?
I think that's apocryphal; https://news.ycombinator.com/item?id=9961530 suggests so anyway. The cause is probably the same; $1 is seen as an irrelevant amount of money by most people.
Even so, you compare very different things, and the result is not terribly informative.
I think the fact that music is so easy to get for free makes it difficult to assess what value people would place on it if that outlet wasn't there. Surely some portion of the pirates would pay for the music they're torrenting if it wasn't available for free.
The specific reasons for how people place value on music aren't hugely relevant; all that should matter for the label in most cases is maximising the total revenue (as for digital downloads the marginal cost is irrelevant).
A coffee or chips is a consumable, as soon as I use them they're gone and nobody else gets to consume them. They don't compare.
A trip to the cinema, without paying for unnecessary and expensive food and drink, only costs about 6x-10x more for something that costs considerably more to produce than a song. Jurassic World cost $150,000,000 to create and I got to watch it for $9. Skipping the cinema altogether, I can buy it on disc for about the same price at a later date and watch it as many times as I want.
A song has a tiny fixed cost per unit sold. Personally I think that my compensation to the artist (not their total compensation) for their effort in creating a song is pretty fairly priced at about $1 given their investment and costs. If they made something amazing, maybe a few million other people will also chip in and they'll be rich.
Honestly, I'm also not convinced money has any impact on the quality of music either. Amazing musicians often do well for themselves but lots of the big names in music put forth formulaic crap and pandering lyrics too. We get bargain-barrel quality despite those musician being well compensated, while some of the best performances I've witnessed are local artists still working a day job to survive and playing gigs on the side because they genuinely enjoy doing it (knowing full well their chosen genre to perform will never be a million dollar mainstream hit-maker).
That hypothesis is not supported by my model of economics.
Price is largely determined by the marginal cost to produce a good, and by the consumers' willingness to pay for it.
If demand is such that consumers are not willing to pay more than the marginal cost of production, the good is simply not produced. Firms with the highest costs drop out of the industry, one by one, until the remaining suppliers can make money again.
Music isn't exactly a fungible commodity, but it's close enough. There is a powerful substitution effect, at the least. If people think $1.50 per track is expensive, then guess what? If you can't sell a track at a lower price, you're going to go out of business. If you drop your quality to lower your costs, then guess what? Consumers will adjust the price they are willing to pay based on that lower quality.
So your implication is backwards. Bargain-barrel quality yields bargain-barrel prices, not the other way around. Lower price expectations yield fewer products on the market, and the survivors will generally have the highest ratio of quality to price.
The musical skills really only come into play when price expectations rise high enough that new entrants to the market can be supported. If people were willing to pay $2 per track, you would need those skills to cash in. The skill requirement is a barrier to entry, not a cost of production.
The hilarious part about this is that the OP is not only not willing to spend $.50 USD extra on a song... it is that it is for a song that he already loves and has listened to many times! What a great way to reward that artist!
My very favorite songs I've listened to a hundred times or more. In one case, I wanted a remix that wasn't even sold as a single, so I ended up paying about $50 for a promotional copy (given to DJs) on eBay.
Point taken, but keep in mind this probably isn't the artist's only song, the sound guy's only mix, or the recording equipment's only use. What is the marginal cost of using that mixing board to do one song? How many people are buying the song? As a digital good the per-unit cost of selling the song to another person is next to nil. It's not obvious to me what a fair price is for a given piece of music, but it is obvious that if say everybody in the world bought a copy at $0.01, nobody involved in the production would be going hungry.
I get what you're saying but that doesn't answer why a hybrid model isn't more common than it is.
Show me ads to monetize my free consumption of your service, but if I'm willing to pay (as many definitely are), allow me to subscribe to disable the ads. Why isn't this model more common? Is it because advertisers tend not to want to advertise on a platform where people can opt out of their ads?
There was a post on HN last week where the author provided a reasonable answer (or at least I think so) to this question.
The gist is that people who are willing to pay a subscription to disable ads are exactly the people that advertisers would like to target. When a service assembles a list of such people, the value of that list to the advertiser generally exceeds the sum of the individual payments provided by the subscribers.
You can increase the subscription fee, but then you'll have less subscribers and the ones who are left will be the most valuable to advertisers (i.e. they have the most disposable income). If you decrease the subscription fee, you will have more subscribers but not a lot more, because the primary obstacle for online subscription type services for most people is not the price but the idea of paying for something they are accustomed to getting for free.
So if you get 1000 people to pay $1.00 per month for your niche Swedish grunge music streaming service and double the price, a decent number of them will not like that and some of them will unsubscribe. But if you halve the price to $0.50 per month you won't see many new customers since many people aren't willing to pay even small amounts for music streaming. Advertisers, meanwhile, don't have these mental obstacles and just try to price things as objectively as possible. And they see a narrowly targeted list of people with a highly correlated list of interests and purchasing tendencies and value it appropriately.
This might explain why services like Hulu have gradually introduced more advertising into their paid subscription services. As long as two groups of people are are paying them (customers and advertisers) one will generally be willing to pay more. Economic forces on the internet seem to result in advertisers having more purchasing power here.
Most non-text media sites sell advertising directly, because most of the on-demand ad networks / platforms that provide a real-time auction are simply too slow. I've seen ad stacks that spend over 4 seconds determining which on-demand ad network will fulfill the view - usually accomplished via VAST chaining. VAST 'tags' are xml manifests for an advertisement, and can contain links to other VAST tags in lieu of supplying the ad unit data directly - and each hop on the VAST tag has the chance to drop a cookie on you.
Because ad networks suck for the user, selling direct advertisements is better. Because ad networks suck for CPM, selling direct advertisements is better.
Two primary metrics used to directly sell direct advertisement is viewership and consistency. Advertisers not only want to buy lots and lots of eyeballs, they want to be sure the entity selling those eyeballs can actually fulfill the desired number of eyeballs. The details of an ad buy can take quite some time to work out.
If the cost in man-hours to work a deal for $X eyeballs is more than CPM*($X/100), a company won't even try to sell the deal. Likewise, if the benefit of having $X eyeballs view your advertisement is less than the cost of your ad buy team's time plus the cost of the advertisement itself, you won't buy that placement. Since the ad buy team and the ad sales team's efforts are fairly constant with respect to the size of the deal, small deals are verboten - on both sides of the table.
And if you've got subscribers that don't see ads, that's leverage you don't have when you're trying to sell ads. And since your subscribers are probably more affluent, they're the audience your advertisers probably want to subscribe to anyways.
As soon as 'Ads' becomes the primary revenue driver (unless you're an advertising company), you've failed. IMHO.
50% more? iTunes is a premium service. Buy songs a-la-carte at $0.99 and pay more than you would for the whole physical album. Or am I out of touch? Back when I was buying music you could get CDs for $10 or a little more, and they usually had at least 10 songs on them...
It is a lot. Record companies don't want you to buy online, they want you to prop up their traditional multi-middleman distribution schemes, so they can go on paying a artists a fraction of a percent of profit from the record sales, and only after the band's high-risk "startup loans" are repaid.
Think of all the expenses that don't have to happen when distribution goes online, and yet the price stays the same (or goes up, now you're paying for the convenience.)
A CD might have 10+ tracks on it, but it's a fixed bundle of 10+ tracks chosen by the artist, so of course the per-track cost on a CD is going to be lower than for individual tracks.
I don't really think I need to explain any more, but go ahead and look for cheap CDs online and tell me $0.99 per track is a bargain basement price. Half.com has CDs for $2.99 or less section, with many whole CDs coming in under $1. Even Best Buy has a CDs: $5.99 or less section on their website. Those are more like "bargain prices," in my opinion, and those are physical media that had to be shipped in and no doubt you pay extra to get them shipped back out, but (unless you really just wanted to have the one song) it's still cheaper.
I just went on the iTunes store and picked random albums from the front page, a few to be extra thorough, and you know what I found? Most albums are $9.99 or $12.99 with single tracks for $1.29. Maybe it's because I'm browsing "chart toppers" but after clicking through a couple of albums, I honestly don't see any songs for $0.99.
Where can you actually buy music online that is any more expensive than iTunes, if it's such a bargain?
The bargain basement part came from sound quality and being able to buy single songs. Apple's iTunes does have $.69 and $.79 songs along with bargain album prices of $6.99 (on the front page with links to cheap albums under the category headings near the bottom of the front page).
Honestly, for a rant that detailed about how corporations are ruining the internet, I kinda expected OP to know how to save songs off SoundCloud.
The worst part about this "modern web" for me is that mobile browsers can't seem to download a file from a website using simple HTTP authentication, because someone thought it would be a great fucking idea to write a separate app to manage downloads, and they never thought that someone might still be using HTTP simple authentication in 2014. So no, sorry, you can't download that file because our developers needed to write yet another app and didn't consider your use case.
I came to say that. Don't believe in the cloud. Just own the things you like to consume more than once, just save them on your hard drive, and sync all of it on all your devices. It requires some setup and attention but it works very well. I do need all the pictures of my family on all my devices, I don't need them on a cloud. Same for the music I love.
"The cloud" is many things. A streaming service is clearly flaky; a storage service like S3 or Nearline where you can put an encrypted offsite copy of your files is helpful, despite both being "cloud" services.
Firefox for Android can download files from websites using authentication just fine; it uses its own download manager that gets passed the authentication info from the main browser.
I worked for a company that made CDs for independent artists, and started selling Vinyl (didn't manufacture those in house, though). Vinyl is expensive to make, and heavy and expensive to ship. So I'd guess the vast majority of that cost would be eaten up in raw manufacturing and shipping costs, without even talking about middleman costs. And if I recall, our margin was pretty small.
Just last weekend, I saw the episode of "How It's Made" on Science Channel that covered vinyl pressed records.
Here's a comparison of the processes.
Vinyl:
- Manufacture lacquered master discs (50% QC rejection rate!)
- Ship lacquered discs to recording studio
- Put master in recording machine
- Cut test groove
- Inspect with built-in microscope
- Cut lead-in
- Cut audio tracks, in 2-channel stereo
- Cut lead-out, label master by hand
- Ship back to factory
- Use chemical process to create nickel-silver negative
- Peel metal negative off lacquered disc
- Manually find center with microscope
- Center-punch and trim metal master
- Use metal master to stamp out vinyl disc copies
- Ship heavy discs to distributors
Digital:
- Press "record", press "stop"
- Upload raw audio tracks to studio file server
- Sequence and mix raw audio into master song track
- Assemble album
- Add metadata
- Re-encode master tracks to consumer quality
- Upload to distributor's server
The capital requirements for digital recording are very low now, having benefited from Moore's Law. If you can buy just one high-quality microphone and one decent laptop, and invest a whole lot of your own time, you can single-handedly produce an album with quality comparable to the best studio recordings of the vinyl era.
While Bobby McFerrin is the first person that I am aware of who did this, some artists will record separate tracks of themselves performing every part of a song, and painstakingly assemble the result in the studio to make their album. Then they hire other people to play those parts at live performances, or just leave some parts out.
In the vinyl era, you needed session musicians on staff at the studio. If someone screwed up, you couldn't easily re-record just that track. You usually had to re-do the whole thing.
So there are good reasons why music was relatively more expensive back then. Those reasons no longer apply.
They didn't cover reel-to-reel recorders in that episode.
Obviously, recording the raw studio performances directly onto the masters that were to be reproduced would be a waste of resources. Multi-track reel-to-reel recorders were still pretty costly, even if the tape was relatively cheaper than the other costs of recording. That tech also improved up until the digital era, but I imagine most of the progress now goes into computer software.
People haven't really recorded directly to a groove in a plastic medium since wax phonograph cylinders. When you cut a vinyl master, you were probably doing it from tape.
Don't forget printing, labels, test presses, and pre-mastering. I started a vinyl record label a year ago and it's wild how man people/businesses are involved in the manufacturing process.
Plus retail has its costs too, markup for vinyl used to be around 50%, plus VAT. So you'd buy the 12" from the distributor at 5–6 € net and sell it for 9–10 € incl. tax (numbers from 10 years ago in Germany, probably haven't changed all that much). Owing to low volume (you can only move so many units), running a record store inevitably leads to self-exploitation.
Everyone is chiming in on this point, so I don't think I wrote it clearly enough. I would be willing to pay $1.50 for a song if it were through a known party, like Amazon Payments or PayPal. I've bought lots of music through Amazon. I'm not going to risk $1.50 to an unknown website. Additionally, my expectations as a consumer have been set to pay 99 cents per track, so to me, in the current atmosphere, $1.50 seems like it's too much, even though to the artist it might not be. The other issue I didn't touch on is DRM. Do I get the MP3 to keep forever if I pay? Most times, no.
> I'm not going to risk $1.50 to an unknown website.
$1.50 isn't much of a risk you know, even if you don't know the website. You'd probably even get the song!
Also, if a song is on Audio CD, it's probably on iTunes too.
> in the current atmosphere, $1.50 seems like it's too much
This makes no sense. If you're a true music lover, a great song will give you countless hours of enjoyment and appreciation. Do you seriously think $1.50 is too much for that?
Compare to paying $10 for a movie ticket. You get 2 hours of entertainment, the movie might suck, and you don't get much from watching it again. That's massively worse value than $1.50 for a great song you can listen to over and over again.
I would gladly pay $1000 for Prince's Purple Rain, if there was no other way to get it.
I don't think it's a problem with $1.50 in absolute terms. It's $1.50 compared to $0.99 from other vendors. Artists have set the expectation that songs are worth $0.99 by selling them for that amount elsewhere.
FWIW, I don't buy a lot of music - I use free Pandora and put up with the ads.
"During those meetings it was Warner executives, not Jobs as is commonly thought, who suggested tracks be sold for 99 cents. At the time, many labels wanted to price tracks at $3.49 each. But not Warner.
“When we told Steve, he looked at us like we just gave him a gift,” Vidich recalls. “We knew we needed to alter consumer behavior in a big way. Below $1 was an emotional threshold for people. It became an acceptable impulse purchase.”
> I don't think it's a problem with $1.50 in absolute terms. It's $1.50 compared to $0.99 from other vendors.
Yes, but if you only have the $1.50 option for buying a song you supposedly love, it simply makes no sense to refuse because other places sell other songs for $0.99, especially considering the massive value for a measly amount of money you get either way.
> This makes no sense. If you're a true music lover, a great song will give you countless hours of enjoyment and appreciation. Do you seriously think $1.50 is too much for that?
Just to add to this: since you've been streaming the song, you already know that you enjoy it! There is no risk to you, as a consumer, of purchasing something you'd dislike. This, to me, is the genius of streaming services. I know that my money, once I spend it, is going to artists I enjoy.
> I'm not going to risk $1.50 to an unknown website.
While that's a fair decision keep in mind that Paypal started as an unknown website at some point.
I have used Paypal as a commerce before for my online game and I can't stress this enough... their policies are awful. I don't blame an independent artist for trying an alternative, even if it is an unknown one.
Good point. I routinely pay $2.49 per track over at Beatport for DRM free 320 kbps quality. Can I find the same music on iTunes or Amazon? Sometimes, but there's a premium that Beatport can demand through having exclusive / niche content, which seems lost in the context of this discusstion (more or less).
> I'm not going to risk $1.50 to an unknown website.
Is that really what you wanted to say?
Because before you wrote this, I was under the impression that you don't want to risk your credit card details (and therefore risk the overhead that fraud or a hack on that site would cause you). But the if the problem is a whole $1.50, then I simply don't understand what difference the counterparty in this transaction makes.
It was via credit card, but it was a smaller site I'd never heard of (I'm into music but not enough to know this place..maybe they're legit and I just didn't spend enough time doing research) and I was weighing the responsibility of thanking the artist the cost of buying a single track on a fairly "random" site and watching my credit card like a hawk for a month. It wasn't worth it to me in the end, ultimately. Typing this out, it seems a bit harsh, but I think a lot of consumers go through this same mental process. When I wrote an ebook, I put it both on Amazon and through a Shopify-type store where people could buy the DRM-free version. 99% of those people chose Amazon, and with good reason.
That is simply because most people have their credit card info saved in Amazon already. And people are lazy.
And yeah I would be reluctant to use my credit card on a shady looking website but I don't even think twice about using my card at shady looking businesses. For example, just last week, I bought tacos from a taco stand inside gas station.
Was site shady looking or just unknown? For me as long as site has valid certs & professional UI, I am usually fine with it. Also if you are using credit card, you are not liable for any fraudulent charges.
Digital compared to physical is no comparison at all. A physical shop incurs physical consequences - like people knowing where you are, where your address is, and being able to say "it was over there".
EDIT: And credit cards still require you to reasonably show the charges are fraudulent, which means hey, you get to report it. And now you're out a credit card, so you also need to change it on all the places you need to use it.
Anecdotally, I got my credit card frauded 3 times over the span of 4 months a couple years back. I started reviewing sites I'd purchased with online wondering where my details might have been leaking out. Lo and behold, a local store nearby had their POS systems hacked. It took a quorum of local people on reddit to identify that it was this store in particular. My point is physical locations are just as insecure as websites and in fact it's usually a lot less obvious than remembering that sketchy website you bought an MP3 from and never going back.
In all cases it was also my credit card company that called me to let me know I was the victim of fraud on my card. Is it really the case that people need to hawk their accounts? I haven't had that experience for years now.
A couple years ago, I bought 1 week of Soylent with Bitcoin.
Last year, I bought another batch. No more Bitcoin, but at least they accepted Paypal.
Now I’m looking to buy another batch, but they are asking me to trust them with another copy of my debit card. No deal. Back to 100%FOOD.
I pay cash for everyday stuff. After the Monoprice hacks, and then the Target hacks, I’ve become extremely leery of giving my payment information away. I’m looking for a big payoff, like being able to pay at multiple vendors, and I’m looking for a well-defended infrastructure that will definitely let me know if it gets breached.
I clicked on one song that I loved. It took me to Amazon, but the song wasn't available on MP3, only on Audio CD or Vinyl.
I immediately clicked away. I would gladly buy it on MP3 for 99 cents. But not wait for 2 days for a CD to ship.
Seriously? TWO DAYS. You can't wait TWO DAYS for your beloved music to arrive? This must be the pinnacle of someone with a low attention span. Ironic considering they painstakingly searched out each artist to buy their music, only to stop when they learn it will take two days to get it?
I would not buy a $1.50 song on such a site. Here's why:
$1.50 is not worth the scale of mental investment required. I'm not going to give my credit card info to a site that I'm only going to use once. I'm not going to give my info to a site I don't trust. I will buy my music from the places I am already invested in.
And it is an investment: it takes time, attention, trust, and memory to use a website. The cost of that song is not $1.50 to me. (If it were, I would have no trouble paying it. I think that's a perfect price for a song.) The cost is an arbitrarily long commitment to managing the risk involved with using the site.
Which is only worthwhile when I know I will come back regularly. When I can say "I plan on buying a new song every other day, and that I'm ok with spending hundreds on music from this one site." Or when I can justify a larger purchase that is exclusive to the site.
I think the mean price per song is certainly less than $1.50 over my entire music collection.
That assumes an average $15 for CDs with an average of 10 songs on them. At that price, I get the original uncompressed audio, FLAC files for digital storage, and whatever lossy transcoded files I might like to put on my player devices. And all of them are free of DRM, or at least freed from it at the ripping step.
In that light, to pay $1.50 for a digital download of a lossy-encoded file is pure madness. Despite the cost requirements of manufacturing, transporting, and distributing a physical medium, I still think the best value for buying licensed music performances is to get the whole CD and process the digital files yourself.
And whenever I [rarely] buy digital downloads, I will only pay for lossless file formats. I might download a gratis MP3, but only as a means to determine whether I might like to buy the album, or if there is literally no better way to get that recording.
I simply don't trust the digital music distributors to defend my interests in this industry.
If it was Bandcamp, TopSpin, 7Digital, databeats or Bleep, these are hardly unknown players in the digital download industry. The price for escaping from iTunes is a bit of diversity and slightly higher prices.
Edited to remove whinge about the price, it's not relevant. The author has let me know that the shop was http://shop.coldbusted.org/music which happens to be a frontend to Bandcamp.
I saw a figure recently that the value of a single user, over the course of a month, to all of the people advertising to them, is just over $6.00. I know that's not what you're asking for, but that's the most related actual figure I've seen.
And then OP wonders why everyone is making free services plastered with ads instead of charging.