| M|E: An equation showing how FREE can = $$$ | |
M|E = Music and Entrepreneurship
While entrepreneurial aspects of the music industry have been a focus on my blog since I started I am aiming to make them more explicit going forward. Exploring business model options and simply getting musician readers thinking of themselves as entrepreneurs will be two main aspects of such posts. So when you see M|E expect a more business/entrepreneurial slant on things.
To start off though before exploring new models, here is an equation that summarizes the current landscape quite nicely:
(A x B x C) - E = D
A = the total # of people who acquire the work
B = the percent who actually pay for it
C = the average amount each person pays
D = the total revenue received
E = promotional and marketing expenses (not to mention recording, mixing, and mastering costs)
The equation comes from David at Digital Audio Insider. He explains it in more detail and provides some context as well and you should definitely take a minute and have a read.
Then keep it in mind when you are planning your next release and how you can tweak any of A. B or C because as noted:
In theory, the beauty of the equation is that — if all else remains the same — any increase in A, B, or C, however small, results in more D.
Keep the equation and more importantly the idea behind it in mind when planning but read the post to see the catch.
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4 Comments so farLeave a comment
< ![CDATA[This is all very true and very well presented. What's truly amazing, though, is how rapidly and drastically the face of the music business is changing. Selling records and filling venues just doesn't happen the same way it has to. Equations like this show how we're almost going back to square one as an industry...]]>
< ![CDATA[Hey
I agree completely - I think there is a chance right now to reinvent the way things are done, and it just might be possible to set things up in a way that benefits artists first and the business folk [still] but second.
But I can also see the old phrase the more things change the more they stay the same applying sadly.]]>
< ![CDATA[[...] In my post M|E: An equation showing how FREE can = $$$ I noted the equation David from Digital Audio Insider posted: (A x B x C) - E = D A = the total # of people who acquire the work B = the percent who actually pay for it C = the average amount each person pays D = the total revenue received E = promotional and marketing expenses (not to mention recording, mixing, and mastering costs) [...] ]]>
[…] my post M|E: An equation showing how FREE can = $$$ I noted the equation David from Digital Audio Insider posted: (A x B x C) - E = D A = the total # […]
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