My Love of Markets

September 17th, 2006

5 years ago I back-packed Europe with my brother. Our second stop was in Amsterdam, arriving at midnight to a thunderstorm. We painfully found out that every bed in the city was fully booked.

Stranded in a downpour without a bed we did what anyone would do - found an all night internet cafe.The price was so cheap that I was in internet paradise. The following afternoon I went back, excited to further exploit Amsterdam’s virtually free internet access. My jaw dropped when I saw the price - it was an order of magnitude higher than the previous amount. Turned out that the internet cafe, EasyEverything, priced access at market rates - attempting to reach supply/demand equilibrium at all times of the day.

That’s why I was excited when I heard, through my friends Eric and Matt, that a new service, Amie St, is “developing a marketplace for music where the price per song is determined by market demand”:

Amie Streetallows prices for pieces of music to fluctuate based on artist interestand demand. The songs start at a great price, free, and can climb allthe way to 98 cents. [From Eric]

Also innovative and clever is Amie St’s music recommendation method:

I’m going to explore Amie St for a few days. If you’re a member add me as a friend, my member name is Fraser. Hopefully I’ll have some great (free) RECs for you.

Update: Techcrunch has a piece on the beta launch of Amie St with links to other innovative music distribution companies.

Viewing 6 Comments

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    How do you determine the correct value of the song in the market? It's no simple thing, not supply and demand.

    The real value for listener is pleasure. In this equation, the value of my favorite song as a listener is inestimably high. Like the best art, it's beyond value. At the same time, a song I don't like is totally without value. Doesn't matter how polished it is, it's worthless to me.

    In practice, we assign a value to things which are beyond value relative to other things which are beyond value. Try sorting your top ten favorite songs and see how slippery their relative positions are! Unfortunately, the "pennies per song" model comes along, and a truly great recording by a big star is pegged at $.99. They can make a living at that price point, but my "half as good as that" song isn't selling twice as many copies, even at half the price!

    My point is, value is not truly set by the marketplace- value (to me as a listener) is entirely subjective. I want a system which ties the listener's valuation to my reward as an artist.
    • ^
    • v
    How do you determine the correct value of the song in the market? It's no simple thing, not supply and demand. The real value for listener is pleasure. In this equation, the value of my favorite song as a listener is inestimably high. Like the best art, it's beyond value. At the same time, a song I don't like is totally without value. Doesn't matter how polished it is, it's worthless to me. In practice, we assign a value to things which are beyond value relative to other things which are beyond value. Try sorting your top ten favorite songs and see how slippery their relative positions are! Unfortunately, the "pennies per song" model comes along, and a truly great recording by a big star is pegged at $.99. They can make a living at that price point, but my "half as good as that" song isn't selling twice as many copies, even at half the price! My point is, value is not truly set by the marketplace- value (to me as a listener) is entirely subjective. I want a system which ties the listener's valuation to my reward as an artist.
    • ^
    • v
    Putting music out there and relying on sponsorship doesn't capture the correct value of the song in the market. A market pricing strategy seems to be, in theory, an elegant solution to assigning the appropriate rate to an individual song.

    The digitalization of music is doing more than simply changing the pricing structure of songs. It's destructing old value generating options and creating new ones. Beck said it very well in reference to his latest album: artists need to find the best way to give their music legs.

    Sponsorship from fans is one option, but it leaves a lot of lost value for the artist on the table.
    • ^
    • v
    The internet cafe has the right idea- but then, there is limited space there. This model isn't the right model for music, which is not made more scarce when it is shared.

    No one can earn a living at pennies per song. Unless they sell millions of songs. Who can sell millions of songs?

    Better that the songs be free, and true fans pay to support the bands continued existance. Sponsorship.

    It's a beautiful thing.
    • ^
    • v
    Putting music out there and relying on sponsorship doesn't capture the correct value of the song in the market. A market pricing strategy seems to be, in theory, an elegant solution to assigning the appropriate rate to an individual song. The digitalization of music is doing more than simply changing the pricing structure of songs. It's destructing old value generating options and creating new ones. Beck said it very well in reference to his latest album: artists need to find the best way to give their music legs. Sponsorship from fans is one option, but it leaves a lot of lost value for the artist on the table.
    • ^
    • v
    The internet cafe has the right idea- but then, there is limited space there. This model isn't the right model for music, which is not made more scarce when it is shared. No one can earn a living at pennies per song. Unless they sell millions of songs. Who can sell millions of songs? Better that the songs be free, and true fans pay to support the bands continued existance. Sponsorship. It's a beautiful thing.
 
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