Music 2.0 - Exploring Chaos in Digital Music

September 8, 2006

MySpace & Snocap sell your music at a price - Caveat Venditor

Filed under: Music Industry — maths @ 12:27 am

MySpace Snocap OK Go

MySpace and its retail technology partner Snocap just announced a deal to sell the music of artistes on its site with the indie band The Format being the first adopter of the model on its MySpace site.There has been active debate on the subject on the Digital Music News blog, with music attorney Steve Gordon pointing out that the artists earn too little at the offered revenue share rate and ultimately it only benefits the vendors (MySpace, Snocap & Paypal) as a result of the Long Tail and in pure money terms, it’s not win-win. My calculations confirm it - say you price a track at 79 cents (let’s assume 99 cents is only for established artists). The revenue share breakdown:PayPal: US$0.30 + 3.4% (for $0 - $3,000 revenue) = $0.32Snocap: 15% = $0.12MySpace: exact share unknown but likely to be from Snocap’s shareTotal revenue for billing/ platfomr partners: $0.44 or 56% of retail price!!That is quite a hefty giveaway by artists simply for billing and platform services.
But Steve Meyer, President of Smart Marketing Consulting Services has a valid point too that MySpace and YouTube offer incredible potential ala OK Go to make it to the mainstream consciousness. So the question is how to balance between fame and fortune. Is all fame and minimal fortune too high a price to pay or is there a sweet spot? Currently, the MySpace/ Snocap deal does not seem to offer that balance as they offer fame at a huge premium by taking the lion’s share of any major revenue potential from successful artists. But then again, independent artists traditionally do not have much negotiating power, so they will have to accept a certain measure of ‘raw end of the deal’

Moses Avalon, Artists’ rights advocate touched on an important point

“Let’s look at the fact that for the first time in history, the artist will be able to go from production to direct distribution to their fans and exposure to literally tens of millions of potential new fans without a single middle-man taking exclusive rights. If that’s not approaching a level playing field, then I don’t know what is.”

This is the most exciting thing about it - the POTENTIAL is there for artists to sell directly to their fans, but in this MySpace/Snocap case, there exists a middleman (to be precise, 3 middlemen!!!) who not only take a substantial revenue and albeit they do not demand ‘exclusive rights’ they do exercise some control on the artist rights - I suggest that you read Snocap’s 13-page Artist Agreement carefully.
So philosophically we all agree that the potential is there for the artist to sell directly to the end-customer but we just need to find the right balance. So from that approach, the MySpace/Snocap/Paypal is a good Darwinian move forward but it needs to evolve more in terms of equity for the artist.
It certainly seems like a great opportunity for a behemoth like Google to step into and offer reasonable micropayment and revenue share rates for the average Joe Musician to sell his music just as it has revolutionised the online advertising market.

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URL

Leave a comment

You must be logged in to post a comment.

Copyright © maths

Powered by WordPress