Amazon/iTunes Price War – How Much Would You Pay For Music?

News that Amazon have slashed the price of more than 100 top-selling downloads to 29p, sparking an MP3 price war, has had artists up-in-arms. “Good Lord just saw you can get it at Tesco’s for 57p!”, Tweeted Calvin Harris, after spotting his new single ‘I’m Not Alone’ in the digital bargain bin. “That track took me two years! No wonder music’s on its arse.”

Well, yes and no. Leaving aside the kneejerk critical response – namely, that the track is so lightweight it’s hard to believe it took him 20 minutes, let alone two years – Harris is being disingenuous here. This is clearly a temporary discount. Over the entire life of the track, it will generate further revenue through mechanical royalties (all those plays from Jo Wiley add up) and licensing. Plus, it will give Harris an excuse to tour: he will air the tune at festivals every weekend from June until September and make a packet.


But there’s a broader point here. Artists who cavil at the supposed ‘devaluation’ of music through piracy neglect to mention the long-term trend, which is that, while money generated by recorded music sales is becoming an ever smaller slice of the pie, the pie itself (taking into account live receipts, merchandising and the rest), for artists on Calvin Harris’ level, is bigger than ever.

What is an MP3 worth? Amazon’s aggressive discounting comes in the same week that Apple announced a new, variable price structure, ranging from 59p to 99p per track (this comes a year after the European commission ruled that Apple had been over-charging UK customers for years).

Some industry figures believe this variability sets a dangerous precedent. Paul Scaife, who runs industry mailout Record Of The Day, warned: “Music has been pretty devalued already. A single track has to be worth more than 29p.”

Really? When I was 15, I couldn’t find the debut Placebo album on sale anywhere for less than £15.99, more than my week’s wages as a paperboy. That was an insane rip-off. 29p a track, on the other hand, feels about right, given the economy of scale involved.

But why pay anything? Streaming services such as Spotify and We7 signpost a post-ownership future, where music becomes, as David Bowie predicted in 2002, like running water or electricity: an inexhaustible, on-demand commodity.


An entire generation has grown up expecting recorded music to be free. That doesn’t make them criminals. The previous generation grew up expecting commercial TV and radio to be free: the pay-off is that you have to sit through a few ads. Everyone understands that, and no-one tries cooking up daft schemes involving ‘micro-payments’, or suing consumers for copyright theft.

In truth, I’m not convinced ad-supported streaming sites will ever make much money. But they’ll make some, enough to cover artists’/labels’ recording/distribution costs while they got on with the serious business of getting out on the road and playing live. The likes of Calvin Harris are not going to go hungry anytime soon, whether their tracks retail for 59p, 99p – or are streamed for free without ever being downloaded at all.


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