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I am not sure that you are right about gouging... .

Posted by John Marks (M) on November 23, 2014 at 08:18:33

In Reply to: I tend to agree, for the most part... posted by rlw on November 23, 2014 at 05:01:11:

I am not sure that you are right about gouging.

I'd like to think that if there were gouging going on, as a record-label owner, I would join in on the fun and get rich quick. However, I have not done so, because there is no guarantee I would not lose money on the deal!

For me to place my recordings with HDTracks or one of their competitors, I would have to have Bob Ludwig make hi-res transfers from the analog master tapes and then author download files. Because most of my analog tapes are from the era that now requires archival restoration (baking before playback), there is extra cost and extra risk. So we are now up to spending about $3000 before we sell one download.

Then, because JMR is neither Universal Music nor a division of Universal Music, I cannot go directly to HDTracks, they want to deal with a content aggregator (in effect a wholesaler or distributor) like Naxos or CDBaby. So now we have a middleman taking his share, which means that just like in the good old days, everyone else in total grosses more than I do, yet I paid the startup costs and I have to pay copyright and artist royalties.

Yes, of course, HDTracks has startup costs and salaries and overhead and pays advertising, etc. Which means that the system trades off efficiency for choice.

So HDTracks collects revenue and pays costs and sends a good deal to a middleman who handles payments and they pay me and then I try to recoup risky startup costs and pay royalties.

The biggest costs in the record business are distribution and promotion. Non-physical product saves you a couple of dollars in manufacturing and a little bit in shipping, but in most cases those savings have to be plowed back into new mastering expenses.

Now, of course, downloads or Tea for the Tillerman and Thriller are certain to make money. But I am sure that HDTracks would say that the "easy" profits on those files are what enables them to spend the labor cost to create product web pages for obscure classical and jazz titles that will sell very slowly.

So, from my perspective of more than 30 years involvement in the biz and 20 years with my own money-pit label, I don't see gouging, I see the same old inefficient system as before.

Anyway, except for audiophiles, I think that for many listeners, on-demand (for-pay) streaming will turn out to be a better deal than owning downloaded files.

As a hardcore classical listener, would I rather pay $20 for ownership of ONE Mahler symphony download, or, for one month's streaming where I can get to know two hundred twenty-nine different (229!) Mahler symphony performances? And if I fall completely in love with one, I can buy the CD or SACD.

There are perhaps only 50 classical recordings (out of many hundreds) that I'd really passionately care about having in the best possible sound, and perhaps 50 pop/rock and 50 jazz. For the rest, streaming works for me.

But that is just my crystal-ball gazing.

And if you want to talk about gouging, how about $35 for a remastered LP of an old performance that has paid for itself thousands of times? Pressing a great LP costs about two bucks. The packaging often costs more.

JM

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