When you head to the iTunes store for that latest Katy Perry magic, do you opt for the $9.99 album or the 99 cent single?
Most of us choose the latter. And that's why, according to Rob Dickens, who headed up Warner Music in the UK for more than decade, album prices must be "radically" slashed--to around £1 ($1.50).
Dickens introduced the controversial theory at The City music conference, where he argued that in order for record labels to combat piracy and boost sales, the music industry must make an album just as impulsive of a buy as a single is today. Lowering album prices, he explained, would spark an exponential increase in sales. Dickens predicts that major albums would sell as much as 200 million copies. (The bestselling album of all time, Michael Jackson's Thriller, sold only half that.)
"What we need is a revolution," he said. "What we've got is an erosion."
The music industry has good reason to be skeptical of Dickens' radical plan. Yes, album sales have dropped dramatically, but they've been replaced by single sales. Why would labels ever replace that steady stream of revenue by the slashing the price of album, which have significantly higher production costs? What would a single cost -- one penny?
"Historically, the price of an album was five times greater than a single," argued Silverman, who believes setting the price of a single at one-tenth of an album's cost was a mistake. Even $1.29 -- the top price on iTunes for a single MP3 -- is too low, he contends. "It should've been $1.99, and then we would've seen higher digital album sales because it would've been a bigger discount for buying an album." Based on increased revenue from digital album sales, he says, the $9.99 price tag is becoming more reasonable for consumers.
So will we soon be paying 99 cents for an album, or $1.99 for a single? Both Dickens' and Silverman's theories have their merits. But there's another question: whether albums are an outdated concept in the age of iPods and Pandora.
"The music business historically has been built around albums," said Silverman at the conference. "This album-centrism is like saying the sun revolves around the Earth. We don't listen to albums now; we listen to collections of songs."