Wednesday, September 3, 2008

Feeding popularity or getting paid to buy

I just saw that a new website, Popcuts, is paying users to buy albums. Well, not quite. Basically, you pay 99 cents, like iTunes, to buy a song. However, if more people buy the song AFTER you purchase your copy, then you get paid (currently by credit to future purchases). The goal is to encourage people to buy music quicker.

Overall, I think this is a failed business model because it encourages people to buy before really evaluating music. This reminds me of a used car dealership distracting the customer with a lot of gimmicks so the customer does not focus on whether the car meets his/her demand. After the user feels pressured to buy a song they grow to dislike, I doubt they will return for more of the same.

One of the hopes that Popcuts has is that people will "invest" in experimental purchases and that independent bands will have a forum to increase listenership. I remain skeptical. Overall, people are likely to learn what makes a succesful hit to increase their revenue and still largely purchase that. For example, let's say I see that new Fall Out Boy song that is so catchy that it is probably one of the few videos that MTV will actually show. Even if I hate that song (and I most certainly will), I am probably guaranteed that I'll get over 99 cents in credit and be able to get more songs for free. Even if I am not one of the first, I will still make a good bit of money since hits can remain hits for quite a while. For example, Back in Black by AC/DC came out in 1980, going platinum. In 1990, the album was 10.00x MULTI PLATINUM and by 2007 was 22.00x MULTI PLATINUM.

Potentially, they could put a cap on the amount that people get for a certain purchase, but this limits the overall "investment" feel that the creators are hoping for. Another point is that this type of behavior would contribute to more sales anyway. That is, until users become dissatisified and eventually leave as I stated earlier.

However, this would be interesting to see how the long tail and short head wage war for area under the curve.

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