MyScene:
Economics of Going Green
Long ago when the Internet started, I was a wee pup of 21. I was in a New York café and a stockbroker was making a pitch to a bunch of tech geeks. “Netscape is the future!” he said. I remember listening to the tech geeks knock the idea of making real money on the Internet. Boy were they wrong.
The proverbial forest behind those trees was advertising. Internet advertising was the wave of the arrived future. It took about two seconds for business to realize: what can be advertised on the web can also be sold on the web.
I started working in Internet advertising in 1997. Back then Napster was new and the new cyber ad agencies where awash in money. Most of our clients where selling physical products like couches or steak knives.
It hit me around mid 1997 – the web was great as an information source but only products that could be easily delivered over the web would thrive. If a consumer needed to see or touch it - that was a much tougher sell.
Where did that leave music? For a brief period sites like CDNow and Towerrecords.com did quite well. But, the future of music sales was clearly in the digital realm.
Fast forward a few years at the company from Cupertino saves (or destroys, depending on your point of view) the music business.
My record company, Avant Garde A Clue, Inc. hooked up with Apple in the summer of 2004. Back then I was looking for a way to release my own music. CDBaby left me cold for some reason and still does. I do think they’ve gotten better though. They now offer musicians the option of releasing digital only copies of their albums.
It took me a year and a half to establish a direct relationship with Apple. It was worth the wait.
Now onto the “Green Label” aspect. I believe in the Green Movement, but I also understand market economics. As I learned from my earlier revelation with the Internet, the easier it is for customers to use or receive, the more likely that product will sell online. So only “green products” that don’t require consumers to rearrange their lives for a nominal savings will flourish.
Here is my appeal:
Our two biggest selling records to date are my version of “Happy Christmas (War is Over)” video and Big George Webley’s remake of “Handbags and Gladrags” which is the theme song of the original UK version of the TV show “The Office.”
Let’s focus on Big George’s record. So far we have sold about 5,000 copies of “Handbags and Gladrags”. Yesterday we sold 11. We sell at least a few everyday without fail.
Our production costs? $15 for a barcode and three hours of design work making the CD cover.
Let’s take a peek at the 1998 version of releasing this record. To sell 5,000 copies I reckon it takes about 20,000 – 40,000 copies on store shelves. The number could be much higher. Plus, instead of making a 600 x 600 jpg for iTunes a physical CD needs mucho print work done.
$750 for the print proofs plus 25k times $.75 per disc equals $19,500 before copy one is sold. And that figure doesn’t include making a PMCD, making one sheets, and shipping, etc.
What if no one buys the CD? What if you only sell 500 copies?
All of that leads to wasted money and wasted raw materials that whether you want to admit it or not will wind up in a landfill after sitting in your garage or closet for five years.
The web allows Artists and Labels to promote their wares much more economically. When people see the Office they head to iTunes to search for Big George’s wonderfully catchy theme song.
Viola, to put it musically, a Green movement that doesn’t ask you to shampoo your hair without water is born.
Truly, the best way to make the world greener is economic incentives, not taxes or guilt.
Digital music will replace the CD aisle at Best Buy like the CD replaced the cassette. Physical CD’s will, and should, be a made to order proposition. Those are good and exciting things for the future of music.
John Romano is musician and entrepreneur who lives in Los Angeles.
He is president of Avant Garde A Clue, Inc. He is also a political correspondent for BBC London Radio. www.johnnyrome.com
Get free music at www.freesongoftheweek.com
