KOAR News
Posted December 17, 2007 — in Music News
18 Million Pumped Into Stiffs: About 60 people lost their jobs at Interscope and Geffen Records on Thursday when both labels merged into one. According to sources, a budget of $18 million was spent in making and promoting the Will.I.Am, Nicole Scherzinger(Pussycat Doll) and Eve albums - all were bombs and two aren’t even out yet.
Is Snocap Melting Away? P2Pnet discusses the possiblity of the mp3 digital retailer Snocap dissolving and offers the gloomier view in monotizing music. The business of selling recorded music is unprofitable for everyone and filling the void are a host of online new companies with enthusiasm but no better economics. Apple can’t even make money selling music, its the ipod that generate revenue. If Apple can’t make money selling music from the major labels, it is suicidal to think that Snocap could make money selling music only from indies. Selling music is like selling gravel. It’s a commodity says p2pnet.
Tickets go on sale at 10:0o a.m., sold out by 10:05 a.m.: Brokers use specialized software to make multiple online purchases of tickets, avoiding the four-ticket-per-customer limit. Kevin McLain, Ticketmaster’s senior director of applications support, estimates that on some days, 80 percent of all ticket requests that arrive at its Web site are generated by bots. For example, Hannah Montana tickets, whose face value is $21 to $66, have been resold on StubHub, on average, for $258, and that is without taking into account StubHub’s 25 percent commission (10 percent paid by the buyer, 15 percent by the seller). Speak about inflation! Do you feel like a sucker? You should. The solution is stop buying tickets for over priced concerts until a settlement is reached between Ticketmaster and RMG Technologies (A company that uses bots). The case is scheduled to go to trial in October 2008.
It all comes back to pricing. No one’s going to be successful selling songs at $.89 or $.99. That’s a given. But that doesn’t mean that selling music isn’t profitable. It hinges on volume.
How is everyone so out of touch with the way we consume digital media?
Comment by Jon Cole — December 17, 2007 @ 12:30 pm
The truth is… no one can live off of .99 cents with one song. That is why you have to make great records!! I make 6 figures a year and im not on a label because i dont just sell one song. This is bullshit pumped by people that don’t understand yet that people still buy music… just record labels dont put music out anymore.
Comment by Cris — December 17, 2007 @ 1:33 pm
Yay! More layoffs and mergers!! There is nothing more fun than dealing with a label employee responsible for more than 90 releases at a time. They are SO focused and on top of things.
Comment by AJ-KOAR — December 17, 2007 @ 1:36 pm
Apple has never made money selling music, it’s always been a loss-leader to help push the iPod, why else would it be only .99 cents a download?
Comment by Paul T. — December 17, 2007 @ 4:04 pm
SnoCap gave out over 3,000 download cards, a day, on Warped Tour. I guess that was their last ditch effort to spurn sales.
Comment by tim.towner — December 18, 2007 @ 6:16 am
A better solution is to simply not buy any tickets sold by Ticketmaster. At all.
As for selling song downloads, why can’t a 99 cent song or a $9.99 album download be profitable? The electronic transmission costs are minimal, pennies at most. The royalty rates aren’t terribly high. The profit margin may be small, but the sales aren’t at a loss. It’s not as if the digital retailers are carrying warehousing, inventory, and whatnot.
So their costs per sale are far lower than physical retailers, and the price can be lower. The only people whining about iTunes sales are the labels, who don’t think they’re making enough in royalties from them, but the sales are profitable to Apple.
Comment by Mondogarage — December 18, 2007 @ 8:47 am
how can an album that’s not released be a bomb?
Comment by barrym — December 18, 2007 @ 1:36 pm