BFM - Bandwidth Conference - what is value of music
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The document discusses how the perceived value of music can change based on situational factors like pricing. It provides several examples showing that consumers will often value a product more if it has a higher price tag, even if the product itself does not change. The document questions whether the common practices of giving away music or selling albums at very low prices could be unintentionally decreasing how much value consumers place on recorded music. It explores different perspectives on what music's intrinsic worth should be.
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BFM - Bandwidth Conference - what is value of music
- 3. WHAT IS THE VALUE OF MUSIC?
- 4. (Or Maybe It Would Be More Accurate To Ask) WHAT IS THE PERCEIVED VALUE OF MUSIC?
- 5. Which Wine Is Better? $165 $2 Rubicon Estate Rubicon 2008 Charles Shaw (Vintage: ???) Bordeaux Red Blend Shiraz
- 6. Can Price Tag Can Change The Perception of Value? According to researchers at the Stanford Graduate School of Business and the California Institute of Technology, if a person is told he or she is tasting two different wines—and that one costs $5 and the other $45 when they are, in fact, the same wine—the part of the brain that experiences pleasure will become more active when the drinker thinks he or she is enjoying the more expensive vintage. Source: Stanford Graduate School of Business / California Institute of Technology http://news.stanford.edu/pr/2008/pr-wine-011608.html
- 7. Situational Pricing: Same Product…Different Prices 20 oz bottle = $0.35 SO WHAT IS THE VALUE OF THE $1.50 = BOTTLE OF COKE? = $5.00
- 8. Situational Pricing: Same Product…Different Prices Warning!: Shameless self-promotion coming up! = $0.99 Single Track SO WHAT IS THE VALUE OF THIS$0.30 = SONG? = $.001
- 9. HUMBLE MUSIC BUNDLE (AUG 2012) 3 FULL ALBUMS: JONATHAN COULTON, THEY MIGHT BE GIANTS AND MC FRONTALOT CONSUMERS PAY WHAT THEY WANT BONUS: IF YOU PAID MORE THAN THE CURRENT AVERAGE PRICE, YOU GET AN OK GO ALBUM, TOO
- 10. Humble Music Bundle The Results Total Sales: $407,609 # of Bundles: 48,689 Avg. Price Per Album: $2.09 ($8.37/4)
- 11. Consumer Actions Affected by Pricing “More Than Good Intentions” (Jacob Appell) discusses the adoption rate of using free mosquito nets vs. the usage rate when charging a small fee. • 70% of nets handed out were not used when valued at $0. The Results When Adding a Nominal Fee (~25-75¢)? • Usage increased dramatically when even a nominal value was placed on the nets. Consumers perceived the nets as being more valuable, and thus more people used them. Source: http://www.trust.org/alertnet/blogs/health-and-science/fighting-malaria-selling-v-giving/
- 12. SHOULD AN ALBUM COST THE SAME AS A STARBUCKS LATTE? (should it cost more?) (should it cost less?)
- 13. LADY GAGA “Born This Way” $1.00 AT AMAZONMP3 Was this good or bad for the value of music? =
- 14. THE DEBATE ON DISCOUNTING ALBUMS Rob Dickins (Head of Warner Music/UK for 15 years) said: “Radically" lowering prices would help beat piracy and lead to a rapid sales rise. “The price of music albums should drop to 1GBP.” _____________________ Jonathan Shalit, who discovered Charlotte Church and manage N Dubz & Russell Watson, described it as a "totally ridiculous suggestion.” "Right now if you buy a bottle of water, it's £1. 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. Source: http://www.bbc.co.uk/news/entertainment-arts-11547279
- 15. GIVING AWAY YOUR MUSIC Does it increase or decrease the value of music? MORE FANS MORE FRIENDS MORE BRAND AWARENESS MORE MARKET SHARE ULTIMATE GOAL: SELL MORE MUSIC, MERCH, TICKETS, ETC. i.e., Create More Value??
- 16. TAKE AWAY QUESTIONS • Does recorded music still have an intrinsic value by itself? • How does pricing affect the perception and the desirability of music? • Is giving away music for free devaluing music? • How did music become a loss leader for merch as opposed to the other way around? Why not give away a t-shirt free instead of the album? • Is an album worth more than a latte? If not, then why not? • Why aren’t streaming services able to convince music consumers that $9.99 per month is a great deal?
- 17. THANK YOU. Scan to view or download a copy of this slideshow
- 18. TAKE AWAY QUESTIONS • Does recorded music still have an intrinsic value by itself? • How does pricing affect the perception and the desirability of music? • Is giving away music for free devaluing music? • How did music become a loss leader for merch as opposed to the other way around? Why not give away a t-shirt free instead of the album? • Is an album worth more than a latte? If not, then why not? • Why aren’t streaming services able to convince music consumers that $9.99 per month is a great deal?
Editor's Notes
- The studyThe researchers recruited 11 male Caltech graduate students who said they liked and occasionally drank red wine. The subjects were told that they would be trying five different Cabernet Sauvignons, identified by price, to study the effect of sampling time on flavor. In fact, only three wines were used—two were given twice. The first wine was identified by its real bottle price of $5 and by a fake $45 price tag. The second wine was marked with its actual $90 price and by a fictitious $10 tag. The third wine, which was used to distract the participants, was marked with its correct $35 price. A tasteless water was also given in between wine samples to rinse the subjects' mouths. The wines were given in random order, and the students were asked to focus on flavor and how much they enjoyed each sample.
- The studyThe researchers recruited 11 male Caltech graduate students who said they liked and occasionally drank red wine. The subjects were told that they would be trying five different Cabernet Sauvignons, identified by price, to study the effect of sampling time on flavor. In fact, only three wines were used—two were given twice. The first wine was identified by its real bottle price of $5 and by a fake $45 price tag. The second wine was marked with its actual $90 price and by a fictitious $10 tag. The third wine, which was used to distract the participants, was marked with its correct $35 price. A tasteless water was also given in between wine samples to rinse the subjects' mouths. The wines were given in random order, and the students were asked to focus on flavor and how much they enjoyed each sample.
- The studyThe researchers recruited 11 male Caltech graduate students who said they liked and occasionally drank red wine. The subjects were told that they would be trying five different Cabernet Sauvignons, identified by price, to study the effect of sampling time on flavor. In fact, only three wines were used—two were given twice. The first wine was identified by its real bottle price of $5 and by a fake $45 price tag. The second wine was marked with its actual $90 price and by a fictitious $10 tag. The third wine, which was used to distract the participants, was marked with its correct $35 price. A tasteless water was also given in between wine samples to rinse the subjects' mouths. The wines were given in random order, and the students were asked to focus on flavor and how much they enjoyed each sample.