The Paradox of Content Creation

Illustration by Ayo Arogunmati

At its peak, HMV had over 400 stores worldwide. What appears to have occurred overnight was a slow death for the retail record store. With this trend, stating that record stores are dead would be a bit too absolute but not untrue. We can also conclude that this is the reason many artists, not just the highly visible ones, are searching for creative methods to sell their music. It can get confusing, maybe even annoying when the conflict of the moment is between two prominent artists who sell approximately the same quantity of records, but one finishes in second place because of a free album tied to concert tickets or merchandise sales.

Travis Scott, for each day over a 9-day span following Astroworld’s release, updated his merch inventory every 24 hours. If you miss the previous batch, you must wait for the next. Each of these purchases provided not only access to concert tickets but also a redeemable download for Astroworld. Astroworld sold 537,000 equivalent album units with 270,000 in traditional physical copies, 261,000 of streaming equivalent units and 6,000 of track equivalent units. That opening weekend, Travis Scott edged out Nicki Minaj for the number one spot. Nicki questioned the practice of bundling and the accuracy of Astroworld’s sales. She is not the only artist that has complained about the accuracy and fairness of the sales process, DJ Khaled also questioned the process following his second-place finish to Tyler the Creator.

The digital era has forced many companies in the publishing industry to rethink their business models to remain a sustainable business. Traditional print newspapers and magazines have seen revenues decline at an increasing rate, while technology has destroyed the traditional method for distributing and purchasing music. Part of the delayed recognition of the changing consumer preferences by the key players in the publishing industry is that they have perpetuated an incorrect business model, likely unintentional, that they are in the business of selling content. But they never sold content. If content was being sold, why is there no significant price discrimination between good newspapers or better music? These companies were in the business of selling paper or whatever the latest method for distributing music is - take your pick of CDs, cassette tapes, and Vinyl records. Alternatively, consumers never content - they’ve only ever bought the physical book, cassette, or compact disc.

Since consumers never paid more for better content, there are two things artists can do to capture value -  a) giveaway the content freely and monetize indirectly or b) find ways to embody the content in things that people will pay for, according to Paul Graham. 

Prince was the first artist to bundle his album with a concert ticket. The plan for the album Musicology was to give it away for free so long as you purchased a ticket to his concert. The free album plus the tickets accounted for twenty-five percent of his total sales, keeping him on the charts for 28 weeks.  Although the rules were not as robust when Prince implemented his idea, he had a very clear understanding that he was not in the business of selling a song. He knew that the best method to generate income from his content was to give it away for free and attach it to a tangible item that people care to pay for.

Neilsen now has a formal process for counting album sales, which includes a) the requirement that the amount recoverable for the portion of the album sale must be at least $3.49 higher than the stand-alone non-music item, and b) if the non-music item contains a download card or redemption code for the album, then the sale will count once the consumer redeems the code. The changes by Neilsen are in the right direction because it implicitly confirms that the sale of a song is always about the physical product, not the content. 

It is difficult to grasp the idea that content, meaning published material, is not what we buy because there are other forms of information that we would happily purchase if needed. For example, financial information, which resembles content but it is sold with price discrimination. The key difference is that information is something we need to make decisions that can make us money. Content, however, is information you don’t need. Broadcasting is another form of distribution that has some overlap with publishing; however, it avoids the landmine that inflicts publishing by not selling consumers a copy of the same thing repeatedly.

The subscription platforms are probably the best avenue to determine whether we truly care to buy content, however, these operate more like a toll booth than it does a store for purchasing content. The owner of the toll booth sets the prices for you to enter and the actual content on the platforms has no price discrimination. It is unlikely that a consumer purchases the subscription to Spotify, Apple Music or Tidal to listen to one particular song. Rather, it is to gain access to a variety of songs. Spotify pools you $9.99 per month with millions of subscribers, determines a payout formula using listening habits to determine which artists will get paid in a particular month or year. The question for these platforms is whether the allocation of the $9.99 per month is the best method used to pay artists fairly.

There shouldn’t be much protesting about the tactics used by different artists to game the music sales system because artists were never in the business of selling music. Artists have made their income from performing on tours, which is not scalable, but at least restricts the selling of copies of the same content to fans. Merchandise has been great for some artists along with sponsorships with technology and consumer brand companies. 

Artists should compete on sales generated from touring, merchandise, sponsorships and other marketing schemes that lead to the number one spot on the charts. There was never a pure music sale and the faster artists recognize this shift in the culture, the quicker they can change their plans for their future albums.  

Notes

[1] According to Forbes, Vinyl accounted for an estimated 9.7 million album sales in 2018. That's up roughly 12% from 8.6 million in 2017. Vinyl album sales accounted for 13.7% of all physical sales, up from 10% in 2017 and 8% in 2016.

[2] Paulgraham.com

[3] Lately, there have been platforms that are using unique methods to determine what exactly content might be worth. Substack is an example of a platform that allows you to charge your audience a subscription fee to get your newsletter, similar to the video content Patreon except with the use of video content. 

[ 4] As a society, we may come to agree at a point in time that anything that is tagged as content should be a social good and allow artists to monetize the content in creative ways.