

Ask HN: Woot For Music? - jasonlbaptiste

I'm a big fan of the one thing a day (woot, groupon, daily candy,etc.) model. ie- concentrate a huge crowd of people on one awesome thing a day and let it rapidly multiply via social sharing.<p>What if it was done for music?  One artist a day.  Give a track away for free and heavily discount their album (FLAC DRM Free) + other merchandise.  Throw in the sharing goodness of social networks as well.<p>Thoughts? Praises? Pitfalls?
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kirpekar
Woot (Matt Rutledge's brilliance) has tapped into impulse shopping. You don't
really go to Woot wanting to buy a "Sandisk Clip 2GB MP3 Player", but you go
there out of curiosity and if it seems interesting enough, you buy it. Many
others are trying it: Amazon, EBay and many smaller fish, with limited sucess.

Why is Woot successful? They have painstakingly built a unique brand and
successfully kept it alive with the irreverent style, the bag of crap, two for
Tuesday, the occasional woot-off and now over 1.6 Million twitter followers.
Social sharing had probably very little to do with the success of the model
and that's why new upstarts and established players have not been able to
replicate the model.

Will this work for music? I don't know and, really, nobody does. Ask yourself:
is music prone to impulse buying? When you say "heavily discount" how much
room is there to play with?

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DanielStraight
One thing I would say to keep in mind is that in order to give a discount, you
have to get a discount (or lower margins). How will you actually be able to
offer music at a substantially lower price than others? Will just lower
margins work? If not, how will you get a discount on the costs to you?

Also, it sounds like you want to do a lot of stuff for the _one thing_ a day
model. A free track a day. A cheap album a day. A few items of merchandise a
day. Will this still have the one thing a day feel?

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ibsulon
You might be able to pull a decent niche market for independent/small label
music, but large labels are notoriously conservative. The value would come
from the curated music - if they like your tastes and trust you, they'll be
likely to buy. As such, I wouldn't worry about the value perspective as much
as the quality.

Then, the problem becomes the vast amount of music you have to filter through.
It sounds like a low ROI and hard to scale, but a lifestyle business
possibility.

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abscondment
Digital music pricing has such small profit margins that only offering a
discounted item is infeasible. You'd need to already do huge volumes of sales
and can demonstrate that this discount would bring more customers in.

Amazon comes the closest to this right now with their daily mp3 deal, but I
wouldn't be surprised if they eat the cost of that discount.

~~~
mr_eel
"Digital music pricing has such small profit margins that only offering a
discounted item is infeasible."

This doesn't make sense to me. Since there is no physical distribution — thus
less material cost and middle-men — digital music can be sold cheaper, while
still maintaining the same or similar margins.

So a discount just means a smaller margin. As a temporary way of boosting
sales and getting your name about, it makes sense.

Also, with music there reaches a point where all the costs of production are
covered after X amount of sales — depending on pricing and recording outlay.
Thereafter most of the cost of music is profit, making larger discounts
entirely feasible. Of course this can be complicated by things like marketing
costs, but the point is that it's workable.

Even in the case where production costs haven't been recouped, a discount can
be a good way of boosting sales and just getting an artist's name and music
about. In that sense, without any profit the discount becomes and exercise in
marketing, without being pure cost like other marketing pushes.

~~~
abscondment
Everything you write makes sense, but only in a world where music prices
aren't set by psychotic rights owners. Regardless of market influences and
reduced cost of distribution, the majors demand ~$0.70 per track. This is why
major label mp3s cost $0.79-$1.29 just about everywhere.

When you have that baseline which you can't control, profiting from a
discounted mp3 album isn't really possible. Costs of distribution are lower,
but they exist. Your profits can quickly become costs unless you stay at the
standard pricing levels.

I cite these prices based on what I've seen working at a music startup & based
on others' summaries; i.e.
<http://daringfireball.net/2007/09/more_amazon_mp3_store>

I'm definitely _not_ arguing that it should be this way, but describing the
status quo.

~~~
mr_eel
"Everything you write makes sense, but only in a world where music prices
aren't set by psychotic rights owners"

Ouch. That's really unfair. Those sorts of prices are demanded by independents
as well, including unsigned artists — look at indie artists on iTunes for
example. The psychotic rights owners you describe are artists themselves and
surely they have a right to price works as they choose? Just as punters have a
right not to buy if they think it's too expensive.

"This is why major label mp3s cost $0.79-$1.29 just about everywhere."

Or you could just as easily argue that this is market forces at work. That's
the price people are willing to pay, so that's how it's priced. These sorts of
prices apply to many different releases, on both major and indie labels.

"When you have that baseline which you can't control, profiting from a
discounted mp3 album isn't really possible."

I don't understand what you mean by baseline. As for the second half of the
statement; plenty of digital retailers offer discounted releases and I hardly
think they'd be doing that if rights holders weren't making money. Have a look
at 7digital for example. Lots of majors, plenty of discounted releases.

"Costs of distribution are lower, but they exist. Your profits can quickly
become costs unless you stay at the standard pricing levels."

To reiterate my basic argument; once production and marketing costs are
recouped, margins are much higher, making discounting viable. The costs that
you refer to would be a proportion of the sale given to the retailer. So if
you want to make money, discount it, but not so far that it kills your profit
margin. Imagine a 30/70 split your way. You might decide to discount a release
so your split is smaller. _You can still make a profit_.

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csmeder
seems smart to me

