What is the Value of Music?

As I sit down to write this current column, I am reminded of one that I wrote about 9 months ago called "Does Music Have Value?"  That entry discussed the intrinsic value of music as a retail product versus a marketing tool.  Today, I want to address a different aspect of "value" by precisely rephrasing the question as "what is the value of music?"  

We all have seen the ubiquitous television commercials for MasterCard (i.e., "priceless" is the tag line). Obviously, this does not apply when it comes to spending one's hard earned money on various forms of entertainment.  More often, consumers are being forced to evaluate where they get the most value for their entertainment dollars.  This got me to thinking of an EROI - "Entertainment Return On Investment".  There are many different ways to buy entertainment.  For brevity's sake, let's limit it to a few of the most common:  movies, CDs, DVDs, live music, music downloads.  

What is the EROI of each of these items?  As a mere form of experimentation, let's define EROI as a ratio of experiential hours divided by the cost in dollars.

Movies (EROI = 0.13):  Take the two hours of an average movie experience (including trailers) and divide by $15 (one ticket and one small popcorn).  

CD (EROI = 1.33):  Assume that one listens to a CD 20x (about 1 hr per CD) over many years and divide it by the average cost of $15 per CD

DVD (EROI = 0.75):  Assume a three hour DVD (with features) watched 5x and divided by $20 per DVD

Live Music (EROI = 0.04):  Assume a 3 hour show divided by a $50 ticket

Music Downloads (EROI = 2.00):  Assume a 4 minute track played 30x and divided by $1.00

Obviously, many of my assumptions are purely arbitrary.  Yet, still they are very plausible. I could argue that some of the assumptions are actually conservative.  After all, I still have the very first CD that I purchased (along with the first LP, btw).  It still sounds great.  

Many consumers will gripe about the costs of CDs.  It is a common complaint that CDs have always been priced too high and many fans will further object to the treatment of artists by their label.  I would argue that CDs represent one of the best entertainment value that one could have.  It is remarkable to me that the same people who might complain about paying $15 for a CD would often see more than one movie per month and wind up paying $5 (or more) for a bag of popcorn that is worth 25 cents (or less).  

I am not suggesting that there is no room to discount music.   There are many business models that endeavor to make music feel highly discounted or, even, free.  These new revenue structures are very important for the growth and development of the music business.   However, I believe that it is very important for people to recognize the immense value that recorded music has and not to immediately discount it as an overpriced commodity. 

Comments

[Zenguitarguy]

Dear Steve,
a number of years ago I wrote a featured column for an international music magazine. I wrote about the intangibles. The idea was to talk about the deeper aspects of music and culture that went beyond the acquisition of material wealth as sole motivating force. There is something unique in the power of music. I cannot only look at the business side because I am a musician who has chosen to live his life in pursuit of deeper places. Below is the article as published almost ten years ago:

This article was written and published in Musico Pro magazine and written by John March:
Why do we Make Music ?

OK so that seems like a simple question, but is it really? I mean we are living in a global village now, where the cultural imperatives that drive us are becoming more and more confusing. Look around and there are all of these false mythologies driving us in all aspects of our lives. A pan-cultural prevalent myth is that Music can create a lifestyle that is free of the usual constraints and cares that affect everyone else.
MTV tells us that a hit song with heavy rotation can generate Big Bucks and change your life as a human and an artist. Artists speak of being motivated to acts of philanthropy and humane works and pat themselves on the back with Grammyís and other similar awards, even though the essence of awards shows is to hype product and sell more stuff.

So we return to the original question, why do we make music?

Most career musicians and professionals know that unless you are extremely lucky, the life of a musician, composer, player, sound designer, mixer, engineer, is a constant hustle, and that most situations seriously lack in humane treatment, integrity, or nurturing of the creative spirit. Most musicians are not artists with hit songs and heavy rotation. And the truth is, that to a large degree, the entire business of music is actually set up more for musicians and bands to fail, than to actually develop into something powerful. If that were not the case, than an entire cottage industry that is geared solely to developing, and recording and dumping new talent and then moving on, would collapse and fail. Everything has to exist in a category that allows the product to be marketed. Is it Pop or Rock, or Jazz or country, where will it sit in the bins, can I sell it to college students as alternative, or angry young women, can I video this song and create a singing Diva so I can underscore the next romantic comedy from Castle Rock entertainment, or can I sell this to kids in the ghetto who are dreaming of being the next big rapper so they can get out of the place they are in? These are all real questions that A&R people have to ask before they can invest in developing an artist or group.

So again I return to my original question:
In my opinion; We, (that is musicians and artists who devote their lives and not just their youth to the pursuit of the elusive muse). play music because we have to, there is really no choice. A traditional Hindu saying is "We play music to align the spirit", anyone who says otherwise is selling something.

Music is not a commodity or a category, it is a gift. A gift from the musician to the listener and I believe that most serious musicians consider the muse a rare and precious gift received. I want to be clear that I think serious musicians can and do come from every possible genre. I think Oscar Peterson and Michael Brecker have as much in common as Albert Collins and Stevie Ray Vaughn and Keith Jarret and Igor Ostraikh and Mozart and Egberto Gismonti, Ravi shankar or Trilock Gurtu, or some amazing musician sitting in the middle of the Australian outback or on a remote island in Fiji. The common element, or theme that exists amongst all of these musicians is that all of these people express themselves in a way that moves us. Their humanity comes through and evokes something larger than the smaller worlds we tend to inhabit.

I have to be honest and say that I cannot relate to most Pop music as anything other than clothing that one wears for a brief moment and then discards as the fashion or season changes. Few Pop artists actually explore developmental process and engage my mind and heart. But then agaim, that is a music marketing personís dream.

Our entire human history is suffused with the transformative power of music. It is only recently, the last 25 years or so, that our culture has committed the sins of arrogance and pride, and traded in the humanity of music for the commodity and competition of the free market. The end result is an oversaturated market and a dehumanizing process that probably weeds out a lot of the best people as they probably do not fit into some easily accessible category.

Music is a universal language that speaks to us all. It is the Grinding techno beat impelling us to dance, the hard driving melodies and rhythms of Oscar Peterson, the Ragas of India, the rhythms of Africa, the grandeur of Mozart. the voices of Bulgarian women lifted in song, and even the computer generated noises and screaming sonic assaults of alternative grundge. All these things are music. It is the band you stumble on in a bar in the middle of nowhere that are playing so hard and make your feet move and your heart pound. All these things are why we make music. The false mythologies, are merely lies that support the mechanism, the machine, that financially supports the people who live off of other peopleís abilities and experience, and those mythologies have nothing to do with the reasons we play or make music...

We are all capable of moving beyond that. It is the choosing to do so that will actually make a difference.

[steven corn]

Music has had a utilitarian, commercial purpose for hundreds of years. Bach wrote music to perform at Church. Mozart relied on commissions. It's one of the few art forms that can transcend territorial barriers while still earning money for their creators. (Painting and sculpting does this somewhat. But it is much harder to download sculptures than music.)

My personal goal is to help those who make music. It's not necessary to move beyond the financial aspects of music to support the art and craft and people behind it.

[Zenguitarguy]

I wasn't saying that it is necessary to move beyond finance ti o support art or music.. Actually, especially now in these changing times, I recognize the need to find new and creative ways to generate income for working artists. My resposne was actually to the title of of the posted Blog. "What is the value of music?" That question is larger then just economic potentials. Also, historically, it is true that composers relied on individual patronage to support their endeavors. It is, however, only a fairly recent thing that Music became commodified and entered into the free market competitive arena. The laws of supply and demand became applicable, and in my opinion, along the way something important was
forgotten. We are in agreement actually thet "music is not an overpriced commodity."

[steven corn]

Music is definitely not overpriced.

[Kelly Lefkowitz]

I think you are confusing the value of music with the return on time invested.

The true value of music is in what people are willing to do to get music.

For a radio station (I know, very old school), the value of music is in getting you to listen and patronize their advertisers.

For a music subscription service, it is the dollars you are willing to pay to listen.

To a rock band, the value may be what an innocent young thing may be willing to do for a back stage pass. Crude, but you get the point.

Since it is now possible to get music for free (albeit illegally) the value of music is in what you can ask someone to do to get it for free legally. The RIAA likes the whips and chains approach. I prefer finding a 3rd party who is willing to shell out a few bucks to have reasonable access to information on what I like and what I don''t like. what I need, and what I want.

I find it interesting that in the recent years, auto manufacturers paid an average of $300 per new vehicle sold in cost of customer acquisition. Mobile service providers pay a similar amount. Imaging if spending $3 per month were to get them information on what I like and don't. Do you think they could sell me more services? You betcha.

That, to me, is the true value of music.