When Artist Pricing Logic Makes No Sense

Quick story. In 2002 I was making around 600 radio and TV commercials a year. It paid well because I priced at the value of my time and talent.

That year a new client wanted me to create a radio campaign; written, produced, voiced, and trafficked to stations. It wasn't a big order, around $650 not counting the cost for airtime. After bidding and hearing no callback I phoned and was told "I found someone who will do it for $65." O.K. No problem, and I hung up.

I had been undercut before, but it was happening more frequently and with lower pricing.

There was no use insisting, because I made "X" dollars before, that clients should continue paying me the same - especially when being offered such low-ball pricing from others.

Keep in mind that radio stations give away production, so I'd done fine up to that point. My choice? Accept what the market was paying or find a new gig. I chose the latter.

The Process Changed
My past came into memory this morning while reading an article by Sarah Davis at Music Think Tank. I have no way of being sure where she works but her email address goes to "repx.net," which appears to be a service for consumers that promises "Entertainment. The way it should be." According to Sarah's article, pricing of music is the problem. Companies using music simply need to cure that aspect, and all will be well. She has an answer which I thought is convoluted, problematic, and doesn't address real world supply and demand. (In her scenario, there's no mention about the cost of building software needed to do what is being suggested.)

In articles where I read about artists not making enough money, through someone using their music, the one unanswered question is at what point will we see artists realize it's not just music distribution companies that need to alter their view on music's worth. 1) A song holds only the value a person is willing to pay; 2) Thousands of musicians are making free music available; 3) When a new song is introduced, nobody knows if it will catch on. It may cause listeners to tune out.

On that last item above (#3): When attempting to establish, an artist must give consideration to a concept introduced with Napster, reinforced in 2002 with my undercut $650 bid: It doesn't matter what you want to be paid. What consumers are willing to pay is what you work for, or not. Consumers in this case are companies that use music AND people who buy or receive to audio services - or want their music free.

The article penned by Ms. Davis reflects the misguided thinking of respected music industry exec Ted Cohen, that suppliers can set a price over what a buyer is willing to spend and still expect a sustainable business model.

Music holds no value until it becomes a draw, a magnet to people wanting to hear it. Until an artist becomes a brand, that artist is just another producer of organized noise. How good you really are has no bearing on pricing. How much you are sought out does.

One artist will not make or break this system by withholding their music. A group of artists will not have impact either. There will always be someone willing to supply quality music for less - even free.

When discovery was limited to local radio, holding out had its advantage. Distribution is everywhere today, though, and trying to get more money per song from more music services is dead.

Performance royalty payments reflecting what an artist feels they're worth won't work. If all artists make the same, every time their music is played, more exposure will be enjoyed by fewer artists - which you already hear from broadcast radio.

Artists need a different approach to building their brand, improving relationships with consumers, and honing marketing skills.

When a commodity like music is found free in thousands of places, globally, bet that people like Sarah Davis and Ted Cohen will lose with thought that they can bend consumers to their pricing whims. That, is supply and demand.

We will never see equality payments for all musicians - which is how performance royalty pricing works.

Artists need to accept that the market is changed. The $65 moment is here.

Monday, April 6, 2015      eMail to a Friend

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