By now you’ve possibly heard about Canadian metal band, Exes for Eyes, who are offering their new album for $1 in the hope that it will take them platinum.
Citing Taylor Swift as the only artist of 2014 to have gone platinum, and noting that as completely independent artists they don’t have the overheads of major labels, they’re logic involves passing these savings onto music fans.
But will this work? Whilst they’re logic is solid and falls neatly into the principle that lower costs should equate to a lower retail price, a higher retail price often adds to the perception of quality (also known as perceived value). By offering their album for $1 are they actually commenting on the quality of their album? By using this pricing point, are they stating that the quality of their album is inferior to that of major labels?
Furthermore, what happens if this does work? Whilst the record industry is currently struggling to find their perfect price point, will this lead to releases from new artist being priced lower than their more experienced colleagues? Discounting is one thing that the record industry has not been happy with over the last few years. A successful outcome could lead to price differentiation in terms of experience and previous album sales.
This would ultimately leave other new and independent artists with no choice but to price their albums competitively. Whilst this may encourage sales in the short term, it inevitably leaves those who have always seen a smaller cut of music sales with even smaller margins. And whilst Exes for Eyes are correct in that there are less people to pay on independent releases, a greater proportion of independent profit is reinvested into new releases. Lower profit margins will mean less independent releases.
In the end it will be interesting to see if Exes for Eyes achieve their platinum ambitions. Regardless, the fact that I’m writing about this previously unknown band means that they have in some way benefited from this strategy. But the future will tell whether this is simply an online stunt for publicity, or a future business model for major and independent labels alike.