Give it away now.
May 23, 2002 4:52 PM   Subscribe

Give it away now. Salon article on cd-music seller, which gives CDs away "free" but is profitable. How? By charging a $4.95 "shipping fee". Nevertheless, because of the extremely low cost to produce CDs, an estimated $2.64 of that shipping fee is net profit, which is then split 50/50 with the artist. While FightCloud is a small independent company, is this model something that will eventually challenge the big labels to either change or be eclipsed?
posted by hincandenza (10 comments total)
Favorite quote from that great article: "Add the cut for a new artist, somewhere between 10 and 50 cents, and your cost nears a buck. Add $28 million to cancel your estimated $80 to $100 million contract with Mariah Carey, as EMI recently did, and adjust your costs accordingly."
posted by kchristidis at 5:21 PM on May 23, 2002

This whole "free" CD thing sounds more like an attention-getting gimmick than a viable business model. What about the marketing costs, like buying ad space in magazines or sending promo copies to radio stations? (That's the one thing major labels are good at-- having lots of money to buy plenty of media exposure for their bands.) That'll eat up any profits right quick. Maybe FightCloud isn't planning to advertise or distribute their CDs beyond selling them on their website, in which case, they're not much of a record label.

Sheesh. If Salon wanted to write a plucky-independent-labels article, they should have written about Dischord Records instead: a small, cooperatively run label with a regional focus (mostly Washington DC area bands), fiercely committed to a punk/DIY aesthetic, with fixed prices for all their merch ($10/CD, $9/LP, $4/EP, $3.50/7", all postpaid within the US) and profits split evenly with the bands. But I guess that's not as sexy as "free CDs".
posted by monosyllabic at 5:47 PM on May 23, 2002

"is this model something that will eventually challenge the big labels to either change or be eclipsed?" NO! This 'new' business model of using the internet to cut out all the middlemen has, I believe, been tried a few million times. Look at the wreckage, ask the investors. Amazon can get nearly any book yet they are no cheaper and they still can't make a buck. As monosyllabic said, the marketing infrastructure and costs are prohibitive.
posted by Mack Twain at 6:14 PM on May 23, 2002

Looking at some of the artists on the label, I wouldn't even be interested if they paid *me* to buy them...
posted by punkrockrat at 6:20 PM on May 23, 2002

As monosyllabic said, the marketing infrastructure and costs are prohibitive.

Only when the predominant idea of "marketing" involves shoving your product down as many throats as possible to make sure you wring out every possible sale, rather than just putting your product before the public and trusting your audience to find it, to decide what they like and want, rather than having to be told.
posted by rushmc at 7:00 PM on May 23, 2002

People are too busy to find the products they want. Marketing provides value for consumers by allowing them to be lazy. Information and product research costs money, and marketing is the dissemination of product information. Granted, sometimes it's inefficient or inaccurate, but consumers seem to be willing to pay more to buy products they've heard about before.
posted by hitsman at 8:08 PM on May 23, 2002

Wow. That's some cruddy looking music up there on FightCloud. Agreed about Dischord Records monosyllabic; I think a far more interesting article would be about how good old-fashioned simple web pages have made it easier to order music direct-from-label than ever. Music from labels is the best deal you're ever going to get, and it helps the right people out too.
posted by josh at 11:43 PM on May 23, 2002

I didn't know people still believed in "free" on the Internet.
Wait for them in a couple of months on
posted by XiBe at 4:05 AM on May 24, 2002

For those interested, the full interview can be read here.
posted by xena at 4:46 AM on May 24, 2002

I like the business model, and I like the owner's ideology. However, a listen to several of the artists did not impress me. Blah.
posted by 4midori at 11:28 AM on May 24, 2002

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