Tag Archives: Warner Music Group

Study: Digital Song Sales Would Go Up If Prices Went Down

Last year iTunes changed its pricing strategy for songs and began charging more for more popular tunes. The result? Music sales have slowed dramatically. According to several sources, digital song sales grew only 8% last quarter, versus 20% a year earlier for Warner Music Group, with the industry’s fourth quarter growth rate at only 5% over the previous year.

I guess consumers didn’t like seeing the prices increase 30% from .99 to $1.29…

There’s a new study that even suggests that if record companies lowered prices, not only would it spur song sales, but it would also help to combat illegal downloading. The optimal song price, says Wharton business school marketing professor Raghuram Iyengar, is between 60 and 70 cents per song. That’s based on research with over 600 digital music consumers, and laws of supply and demand. See, the forces at play here would indicate that music prices should be lower, not higher:  there’s increased competition, free alternatives, and declining distribution costs. But instead, prices have held steady and recently jumped substantially.

Unfortunately, as an article in Wired points out, the music industry wants to believe that by marketing their wares at higher prices, they are encouraging consumers to perceive greater value in them, rather than subscribing to the theory of supply and demand…

BigChampagne Knows Who’s Listening

big champagneMusic tracking, both online and offline, legit and not so, is big business for BigChampagne. The company, which recently announced a measurement deal with Universal, has done well in recent years by specializing in tracking music consumption across multiple platforms. As consumer listening behavior has shifted, this service has become more and more valuable.

According to Wired’s Epicenter blog, “BigChampagne gets real-time data feeds deeper than what is surfaced to consumers on various services: iTunes, broadcast radio, Last.fm, retail outlets, Rhapsody, and file-sharing networks. It collates this data so that music and marketing people from interns to executives can see what we’re listening to on various networks, allowing them to plan tours, choose singles, and figure out where to advertise.”

Since the company’s launch in 2000, BigChampagne has become an increasingly bigger source of intelligence for record companies about who’s listening to their music, what music they’re listening to and where they are listening. They also have partial IP and zipcode data on illegal filesharing. BigChampagne holds limited partnerships with Warner Music Group, Sony and BMI as well.

As part of the deal with Universal, BigChampagne will provide with an analysis of songs and listening patterns from millions of users of social networks, including Twitter and Facebook, and online music services from iTunes to Amazon.

BigChampagne is definitely looking to eat into Nielsen’s share of measurement of the entertainment sector, and has been quicker to adapt to measuring new platforms. To date, all the reporting is focused on song and artist data – BigChampagne does not provide info that compares services to anyone – so there’s no info on how MySpace Music compares to other services or how iTunes is doing versus Amazon. But make no mistake, they’re watching…

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