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Weblog:   The Numbers: Can Indie Labels Really Make Money Through Downloads? Part 2
Subject:   oops - looks like you skewed the figures there
Date:   2005-12-21 09:56:29
From:   teejay
You've overlooked two pretty important details here.


Traditionally you pay more per track for a single than an album, there is no reason for this to be different when selling mp3's online.


Labels have traditionally worked hard to sell singles in order to a) promote albums, b) get a higher margin, c) sell something rather than nothing to people who don't want the album.


There is no reason for this to change.


In your calculations you neglected to consider that the number of people who will be at least 1 single is greater than the number of people who will buy an album.


Thats a pretty fundamental part of pricing and doing business - the number of people who will buy a product will decrease as cost increases and vice versa - and it is better to sell 20 singles at a dollar each than 2 albums at 7 dollars each.


Also you are forgetting that online sales are often in addition to traditional sales and somebody may buy only 1 or 2 tracks online (or even god forbid hear them for free or get an illict copy) before buying the complete album on CD.


It looks to me that you had already decided what result you wanted, and fudged the figures and maths until you got it.


Poor show - please try and do better than pulling this stuff out of thin air


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  1. Spencer Critchley photo oops - looks like you skewed the figures there
    2005-12-21 22:10:19  Spencer Critchley | O'Reilly Blogger [View]

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