Saturday, October 16, 2010

Music Business expert says something sensible

There was a period in the 1980s when Rob Dickins was the public face of the non-musical bits of the music industry; he was quite good-looking, good on camera and could well have passed for a second-string Radio One DJ at the time.

You don't hear quite so much from him these days, but he's been on a panel at In The City (which, again, you don't hear quite so much about as you used to a while back) where he said something surprisingly wise for a former label executive:

The price of music albums should be slashed to around £1, a former major record label boss has suggested.

Rob Dickins, who ran Warner Music in the UK for 15 years, said "radically" lowering prices would help beat piracy and lead to an exponential sales rise.
Speaking at the In The City music conference in Manchester, Mr Dickins said album prices had already been pushed down by price wars and declining demand, and were likely to fall further.

"What we need is a revolution. What we've got is an erosion. When I was running Warners, a chart CD could be £12.99. A chart CD now can be £6.99, maybe even £5.99."

Some major album downloads currently sell for as little as £3.99 through retailers such as Amazon.

If record labels made the decision to charge much less, fans would not think twice about buying an album on impulse and the resulting sales boost would make up for the price drop, he predicted.
The rise in sales won't be so huge as to be the equivalent of albums retailing at thirteen quid, but there's every chance that it could close the gap to a six quid price point. And you'd only have to charge this for online - there's no reason why physical CDs couldn't still command a five or so. Indeed, given the carbon footprint of the products, they probably should.

It's a sane suggestion, and every experience of online transactions points in that direction. And Dickens couldn't be accused of being some piratey-hippy type. He's one of them, right, so the music industry must be nodding and saying "he could have a point", yes?

Of course bloody not:
Paul Quirk, chairman of the Entertainment Retailers Association, said: "Rob Dickins is part of the generation of executives who benefited from the age of £14 CDs and gave the music business a bad name.

"So it is ironic to hear him espouse the cause of the £1 album. Basic arithmetic indicates that this is a non-starter."
Aw, bless you, Paul Quirk. You think that the brief period when CD prices were being artificially inflated was the only period when the music business had a bad name? You don't think it's behaviour in the last decade has been a bit more besmirching of its image?

After all, charge fifteen quid for a CD, and you're only treating your customers like mugs. Start sending over-inflated, threatening demands to single mothers and grandparents who haven't ever touched your products, and you've suddenly declared war on the world.

And the lobbying of the last few years has been pretty shabby. And let's not even start on the dismal site of the IFPI running round pretending they're police.

So, yes, it's true that Dickins was a big figure during one of the music industry's darkest days, but let's not pretend that things got better when he left.

And for the Entertainment Retailer's Association to have a fit of the vapours at the idea of a product being priced high is absurd. Do they recommend to their clients that they find out the highest pricepoint at which people would still purchase - are they a surprisingly socialist group which says 'hey, people will pay £5 for a CD but that's a bit much, so let's say £2?'

At least Dickins is consistent in his embrace of supply and demand pricing. When demand would stand £13, he charged it. Now that demand suggests albums be much cheaper, he's following that logic.

Sure, he was around at the time of Home Taping Is Killing Music, but even if Peter Sutcliffe was making the suggestion, the evilness or otherwise of the messenger doesn't have any effect on the cold, market logic of the message.
Jonathan Shalit, who discovered Charlotte Church and manages N Dubz and Russell Watson, described it as a "totally ridiculous suggestion".
And if you're working with Dappy, you'd know a ridiculous suggestion when you see one.

Shalit comes up with a ridiculous justification for rejecting the Dickins gambit:
"Right now if you buy a bottle of water it's £1," he said. "A piece of music is a valuable form of art. If you want the person to respect it and value it, it's got to cost them not a huge sum of money but a significant sum of money."
Does anyone who's done a couple of weeks of GCSE business studies want to explain the difference between a physical bottle of water and an unlimited supply of music downloads? Possibly even Dappy could spot that's a bit of a stupid thing to say.

The music industry could have learned something from bottled water: people do pay a quid for a bottle of water, despite having unlimited, almost-free water available on the tap. The existence of torrents of virtually free water hasn't hurt the paid-for water market; Nestle have never attempted to sue people for drinking tap water.

But the price of a bottle of water doesn't really have anything to do with what the price of a record should be, and paying or not doesn't really have anything to do with respect or value. Newspapers cost a pound, and they're expensive to produce, and are still valued by their readers. Numerous museums and galleries charge no admission fee, but that doesn't mean visitors don't value and respect the 'content' inside.

It might appeal to an accountant to think that the only way people can relate to something is by how much they pay for it, but nobody working in a creative field who actually cares about what they're doing thinks in that way.
Chris Cooke, editor of music industry newsletter CMU, predicted that the major labels would "resist it hugely".
Yes, they almost certainly will.
"It is a gamble," he said. "Once you've slashed the price of an album you can't really go back."
Well, actually, you can - after all, the price-cutting frenzy in the quality newspaper market passed, and papers returned from costing pennies to costing closer to a quid; and if the gamble fails, it would suggest that there's no price elasticity of demand in the market for music downloads and so returning to a higher price point wouldn't be much of a problem.

But perhaps the major labels have reached a point where they feel their future is so doomed, they're going to take the short-term approach to try and scrape what they can before they vanish altogether. It's the only real explanation for such a cussed refusal to connect with what their diminishing customer base wants.


The Grub Scout said...

feels a bit like iphone apps. the big sellers on there are all $1 or whatever aren't they? and they sell 10,000 copies in a day because someone will mention some half arsed but vaguely entertaining game to their mate, and cos it's only $1 they'll grab it as well.

the same will work for albums, i'm sure of it.

James said...

"And if you're working with Dappy, you'd know a ridiculous suggestion when you see one."

See, this is why I keep coming back here.

Also, nothing to do with anything, but is this the same Rob Dickins who got a shout-out at 3:02 in Enya's Orincco Flow (played here by Tamsin Greig)?

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