Sent by Jonathan Stark on February 15th, 2018
Would value-based pricing work for the music business?
As a former professional musician, I often think about this question.
What’s the value of music? What is it for? Who would miss it if it was gone?
With precious few exceptions, all purchases everywhere everyday are made on the basis of value.
Is this Coke worth a dollar? Is this haircut worth fifty bucks? Is this first-class seat worth $3,000? Is this oil painting worth $2,000,000?
Regardless of how a seller calculates a price, every potential buyer makes a “yes” or “no” purchasing decision based on the value< to him/her personally. It’s completely subjective and individual.
In theory, I see no reason that music-related products and services could not be priced and sold in the same way.
There are certainly examples of high-value music engagements that command premium fees - I’m sure John Williams doesn’t bill by the hour - but are those just rare exceptions to the rule?
I suppose the challenge for a musician looking to command premium fees is the same as any other expert:
How do I position myself as uniquely qualified to assist a particular type of buyer solve a very expensive problem?
So I guess step one is to answer this:
Who has expensive music problems?
Movie makers are an obvious one. Also TV, video game studios, and probably high-end radio shows and podcasts.
Perhaps chains like Starbucks or J. Crew would pay big bucks for song curation in the retail environment or in their mobile apps?
Maybe billionaire Silicon Valley startup founders would pay for custom designed soundscapes in their offices or homes?
Of course, I’m just spitballing. I don’t know if any of these scenarios are expensive problems. But I am certain of one thing:
The old music jobs that existed under the old music industry model are dead.
The old music industry was a mass-market affair controlled by kingmakers and gatekeepers. And this hierarchy was enabled by specific technologies - radio, records, tapes, CDs - that are no longer relevant.
Any old style music jobs that remain are probably either low value commodity labor, or have odds of success that make playing roulette look like a sound financial investment.
In a culture that is increasing defined by rapidly evolving technology, I think that folks who want to charge premium fees for their musical expertise need to get creative about what their role in society is.
Do you call yourself a musician? What does that even mean? Maybe “music consultant”? Sound designer? Audio architect?
With the old model gone, musicians have to invent their reality out of whole cloth. There’s no one to copy. There are no paths to follow.
This is scary.
But it’s also exciting.
(And oh by the way... it looks like the software business is changing just like the music business changed.)<
P.S. Thanks to Andy F for inspiring for this message!
P.P.S. Today was the Tough Love Teardown. You can watch the replay for free, but lemme warn you: it was a marathon. I reviewed 11 sites over the course of two hours. Things got off to a bit of a slow start but folks in the chat indicated that the advice was super helpful. If you have questions about what to write on your website, I’m pretty sure that you’ll get some good info from watching this session. Here’s the link: https://www.crowdcast.io/e/tough-love-teardown