MI2N
Music Industry News Network
MONDAY, DECEMBER 11TH
Advanced Search
MusicDish Advertising Network
HOME | FREE NEWS SUBMISSION | PREMIUM PR DISTRIBUTION | PR COPYWRITING | RSS FEEDS | TESTIMONIALS | CONTACT

Sections: Band | Business | Career | Events | Label | Music Releases | Radio | Tech | Video | Web Events
Genres: Country/Folk | Dance/Electronica | Jazz/Blues | Latin | Rock | Urban | World
International: Asia | Canada | Europe

Advertise | Artist Development | Submit Video | MusicDish*China | MusicDish e-Journal | MusicDish Network | Urban Music News Network
Business News (more headlines) 01-28-2004

MusicDish/Mi2N Founder Tells The Mill "Music Is A Loss Leader"

Bookmark and Share
Website: http://www.gristforthemill.org/010422music_2.html

In a recent article "Music In The 00s" published by The Mill Magazine, music consultant and music magazine founder/editor Eric de Fontenay reflected on the changing business fundamentals of music as it makes the transition to a digital networked environment (http://www.gristforthemill.org/010422music_2.html).

Commenting on the ¢99-per-song price that has characterized most online offerings, Mr. de Fontenay noted that while royalties already account for over 80% of cost and likely to increase over time, he still thinks we could see prices come down: "The question is, to what extent are companies willing to price below cost. And that's I think where you might see a lot of innovation," Eric told The Mill Magazine's David Fine. "File-sharing has demonstrated already that music is a loss leader. But it is able to generate a lot of ancillary [consumption]. People are going to buy an iTunes song ... and maybe an iPod, or a Mac."

"The concept of a 'loss leader' is where a company is willing to sell a product at a loss in order to generate even greater sales from related complementary products - it's the old razor and blade model: you practically give away the razor for the ongoing revenue from blades sold over the razor's life. Music is increasingly the razor to sell today's blades: MP3 players, PCs and mobile phones."

"The trend has already been prevalent in the brick-&-mortar world where mega-retailers like WalMart or Best Buy price music at a loss in order to attract new customers and boost sales of higher margin goods. Apple and others are just following suit online. This unfortunately leaves online retailers trying to make money primarily off music in the same bind that Musicland and Tower face."

"This is not to say that music in any way has lost any value, well to the contrary. It's value will increae over time as more businesses turn to music to help sell their core, high-margin products, whether its electronics, games or even cars - remember the BMW web movie clips. The commercial demand for music will increase and therefore its value. Whether there will still be pure online music retailers though is questionable."

Mr. de Fontenay though noted in the article that what might be bad for independent online music retailers may turn into a blessing for musicians. "It's going to be interesting to see how the entrance of consumer electronics manufacturers Apple and Sony will influence the development of new music. For example, computer and tech companies might say they want a lot more diversity and go after all types of little niches now considered unprofitable, in an attempt to expand their customer base for gadgets."

Eric de Fontenay has been a diligent observer and outspoken voice of what has been popularly called the "digital revolution." As a telecom consultant in the early 90's, he worked on regulatory upheaval faced by a newly deregulated/liberalized industry challenged by technological revolution from fiber optics and digitization. But it was in was in the midst of his work on emerging broadband networks & markets that he decided to put his ideas and concepts to reality and founded Tag It in 1997.

Today, Tag It is a leading voice within the music industry, challenging its members to think out-of-the-box & imagine the future while empowering a host new stakeholders. Its music industry portals MusicDish (http://www.musicdish.com) & Mi2N (http://www.mi2n.com), and particularly its newsletters, have become a staple of information & analysis for a broad community that ranges from major executives to lonely musicians. Through the MusicDish Network, a collective of hundreds of music sites and webcasters, Tag It is building a media platform to enlighten, educate and bring to light new trends and sounds.

Eric has personally been a vocal participant in leading public forums and conferences ranging from the Consumer Electronic Show to Noorderslag Seminar and Harvard Law School. He has been published in business and academic journals in the US and across Europe, his most recent paper "Peer-to-Peer Networking and Policy" appearing in "Cyber Policy and Economics in an Internet Age" (Kluwer Academic Publishers).

Contact: Eric de Fontenay
mailto:editor@mi2n.com

Bookmark and Share

back | top



MusicDish Advertising Network

Mi2N Music PR

"Mountain Songs" Music From The Heart Of The Mountains

Hybrid Studios Now Offering Online Disklavier Services

Roger D'Arcy Releases 'TUMBLING' From Latest Album HOUSE OF HEADS

Katie Garibaldi Releases Original And First Ever Holiday Album, Home Sweet Christmas

Dark Avenue Premiere "The Light" Music Video

A True Life Touching Song Wins Top Honors In The 22nd Annual USA Songwriting Competition

"I Wanna Be David Cassidy," New Tribute Song To Late Music Icon, Is Released



MusicDish*China Song Blast
Promote Your Music Single In China

News Headlines
Mi2N EDITOR'S PICKS
» Kobalt Capital Closes Second Music Royalties Fund With $600 Million In Investment Capacity
» Rare 78rpm Records Are Being Digitized Using Prism Sound Titan Audio Interfaces
» Asylum Records Relaunched In U.S.
» Emiko Releases New Music Video Highlighting Survivors Of Sexual Abuse
» Billboard Single “God With Us” By CLARĒTA Haddon Gains Mainstream Radio Traction
» Jon Batiste Becomes Music Director Of The Atlantic
» Amazing Music Tracks - Free Music Licensing
» Rick Vines All Stars Travel To SPACE! Mon Dec 4th!
» LOVE MY COUNTRY! Is The Ultimate Compilation Series Featuring 20 Hot New Hits
» New Rock Band Cathedral Reign Recording New Music


Get your music news covered...
Have your press release written
by the pros at Mi2N

Articles
MUSICDISH E-JOURNAL
» Lithuanian Band Grabs Bronze At The Silk Road Indie Music Festival 2017
» Live Entertainment Specialists Headliner Launch Premium Artist Booking Service
» Voice-Controlled Speakers & The Music We Listen Too
» Nordic & British Musicians' Unions' Joint Statement On Sexism In The Music Industry
» Women Make An Impact On The 2018 MPG Awards Shortlist
» The Nashville Musicians Sound Healthcare Plan Rolls Out
» Streaming & Listening Diversity - Spotify Case Study
» Two-Sides Of Copyright Finance: Sound Royalties & Kobalt
» Career Moves: ROLI, Live Nation Sweden, Music Glue, BBR Music Group, Warner/Chappell Music Spain & Blue Night Soundscapes
» Europe's Digital Music Leaders Form Alliance
» Pandora Subscriber Base Grows To Over 5 Million
» Hybrid Studios Announces Online Mastering Services

Mi2N's Music PR distribution service guarantees online exposure for your press release. Choose from seven (7) different packages.


HOME | FREE NEWS SUBMISSION | PREMIUM PR DISTRIBUTION | PR COPYWRITING | RSS FEEDS | TESTIMONIALS | CONTACT

Sections: Band | Business | Career | Events | Label | Music Releases | Radio | Tech | Video | Web Events
Genres: Country/Folk | Dance/Electronica | Jazz/Blues | Latin | Rock | Urban | World
International: Asia | Canada | Europe

Advertise | Artist Development | Submit Video | MusicDish*China | MusicDish e-Journal | MusicDish Network | Urban Music News Network
Copyright © 1997-2017 MusicDish LLC, all rights reserved. Text, graphics, and HTML code are protected by US and International Copyright Laws, and may not be copied, reprinted, published, translated, hosted, or otherwise distributed by any means without explicit permission.