I received many comments on The Price Is Right? post that I put up a few weeks ago. Some of the comments were posted on-line while others were given to me live and in e-mail form. What really surprised me is how many people still defend the argument that music should be cheaper now than it was 15-20 years ago based on the argument that it is cheaper to make and deliver digital music than it was for physical music in the past. Really?
Let’s take the economics of one song and break it down. We are going to assume the ideal scenario for a song that is written, recorded and marketed quickly. Our assumption will be based on an eight hour day which is definitely the exception for creating, recording and marketing a great song.
– A song that takes very little time to write still probably takes the better part of a day (eight hours) What should the hourly rate for a song writer be?
– A song that requires little amount of time to record will usually take at least a day (eight hours) What should the hourly rate be for the studio full of recording gear even if it is in a garage or basement?
– What is the engineer’s time worth based on an eight hours of work?
– What is the producer’s time worth on an eight hours of work?
– Let’s assume you have a marketing person who is able to pull a marketing plan together and execute it in a day. What is eight hours of his time worth?
– You also have the designer who designs the record cover which is required even in the digital age. What is eight hours of his time worth?
– Someone has to upload the music and work with iTunes in order to get it positioned and pictured. What is this person’s time worth?
– A radio promoter spends hours of time calling hundreds of radio stations making them aware of the song and asking them to play it. This is impossible to do in a day but what do you think their hourly wage should be?
– The publicist spends hours of time calling and emailing hundreds of magazines, TV shows, internet sites to set up interviews and record reviews. What should their hourly rate be?
– Magazines, Facebook, MySpace, Twitter, Reverb Nation, and even Google require a nice photo in order to feature the artist. What do you think the photographer’s hourly rate should be?
– Someone has to collect the money and make sure the songwriter’s, artist and Uncle Sam are paid. What is this person’s time worth?
In conclusion, let’s look at the .99 cent price of a song. iTunes keeps .30 cents leaving .70 cents to cover everything listed above. If we take the twelve people listed above (and there are many we left out) and divide up the .70 cents, each person would get roughly 6 cents per song sold. There are no guarantees that a song will sell more than 1 copy and many don’t. At 100 copies sold, each of these people would make $6 total. Based on eight hours, that is .75 cents an hour. Minimum wage is $7-$8 depending on which state you live.
Is this really how we want to value music? Can we change the perception in consumers minds?