{"id":1683,"date":"2014-11-06T06:08:05","date_gmt":"2014-11-06T14:08:05","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=1683"},"modified":"2014-11-06T08:29:21","modified_gmt":"2014-11-06T16:29:21","slug":"price-discrimination-and-timing","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2014\/11\/price-discrimination-and-timing\/","title":{"rendered":"Price discrimination and timing"},"content":{"rendered":"

\"this<\/a>Publishers delay the release of paperback versions of books as a means of price discrimination. ‘Strong’ customer markets pay the premium price for the immediately available hardcover, while ‘weak’ customer markets pay the lower price for the paperback, which is inferior in two ways: less sturdy binding, and you have to wait a year or so to obtain it. This earns more for the publisher than releasing all versions at one time. This strategy is only used where there is a premium attached to immediate access, such as the most popular fiction and non-fiction releases.<\/p>\n

Likewise, movie studios make strategic timing decisions for popular feature films, beginning with a release that is exclusively in cinemas – this solves the dual goal of gaining box office revenues from the strong segment of the market that wants to see the film right away, and also is the marketing campaign for the future releases on DVD, pay-per-view, Netflix and the like.<\/p>\n

So, I’m not sure why it is seen as so unusual that Taylor Swift is not releasing her new album on Spotify right away<\/a>. At the Telegraph<\/em><\/a>, Willard Foxton writes:<\/p>\n

\n

Other singers \u2013 notably Beyonce \u2013 have only uploaded their new albums to Spotify months after launch, to prevent the free service from cannibalising sales. No one has ever pulled everything around a new release, though.<\/p><\/blockquote>\n<\/div>\n

\n
\n

From a business perspective, it’s easy to understand why: a million plays of a track on Spotify nets you about \u00a34,000 \u2013 better than nothing, but still hardly anything. Swift’s album has been a huge retail smash, selling over 1.2 million copies; if everyone who bought it had listened to it once on Spotify instead, she’d be looking at \u00a3400,000 \u2013 a fraction of what the album’s sales have delivered.<\/p>\n<\/div>\n<\/blockquote>\n

\n

The release of a massive new album also stimulates sales of your back catalogue \u2013 sales that won’t happen if it’s available conveniently and free. Some of Swift’s songs have tens of millions of plays. Clearly, someone at Swift’s label has done the maths and calculated they’ll make more by pulling the tracks than leaving them up.<\/p><\/blockquote>\n

I’m only surprised that more musicians have not done the same. It doesn’t mean abandoning Spotify forever, but instead using it as a form of downstream sales, like paperback books and DVD’s of movies.<\/p>\n

\n
Mr Foxton tries to draw a larger lesson …<\/div>\n
<\/div>\n
\n
It’s not just music either \u2013 film, books, television shows, you name it, are all available free online in some form. In some ways, that’s great \u2013 I’ve definitely been excited to find things like rare B sides by artists I love on services like Spotify. Infinitely more people having infinitely more access to art is theoretically brilliant.<\/div>\n<\/blockquote>\n
\n

But \u2013 and here’s the problem \u2013 we now have an extremely entitled culture, where any kind of art is seen as a communal property. Legal streaming services like Spotify and Netflix were supposed to solve the piracy problem. If anything, they’ve actually added to the underlying sociological problem of people simply not being willing to pay for entertainment at home.<\/p>\n

Ultimately, it strikes me that art is less valuable than it’s ever been. If we consume it more, but value it less, what does that mean for society?<\/p><\/blockquote>\n

… I’m not sure successfully. Let me try another approach to the phenomenon he tries to describe. I don’t think it is true that we value art less. We are moved by great music, film, art, literature. But we place less value, in terms of our willingness to pay for it, at the margin. As any good becomes available to us in cheap abundance, we place less value on increments. We are not willing to pay much for ordinary songs and books because there is so much available, and our time to enjoy it is limited. We are willing to pay for something special when it comes along – millions are still willing to buy tickets at the cinema for a movie they especially want to see, book sales have not come to an end, and the best pop singers are able to make albums that go platinum (from real sales) within a week. But we are not going to pay very much at all for the ordinary. So I’m not so pessimistic. Shake it off.<\/p>\n

UPDATE: The Times<\/em><\/a> on Swift v. Spotify.<\/p>\n

MORE UPDATE: In her own words<\/a>:<\/p>\n

…all I can say is that music is changing so quickly, and the landscape of the music industry itself is changing so quickly, that everything new, like Spotify, all feels to me a bit like a grand experiment. And I’m not willing to contribute my life’s work to an experiment that I don’t feel fairly compensates the writers, producers, artists, and creators of this music.<\/p><\/blockquote>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Publishers delay the release of paperback versions of books as a means of price discrimination. ‘Strong’ customer markets pay the premium price for the immediately available hardcover, while ‘weak’ customer markets pay the lower price for the paperback, which is inferior in two ways: less sturdy binding, and you have to wait a year or […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":{"0":"post-1683","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-uncategorized","7":"entry","8":"has-post-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-r9","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":626,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/how-quality-differentials-work\/","url_meta":{"origin":1683,"position":0},"title":"How quality differentials work","author":"Michael Rushton","date":"April 7, 2013","format":false,"excerpt":"It is standard practice to offer to customers a range of quality levels. In clothing, electronics, and cars we see firms offer a range of products as a means of price discrimination: some customers are on a budget, or don't care so much about the luxury of the item, and\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"only rock and roll","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/04\/Rolling-Stones-live-1972-300x227.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2010,"url":"https:\/\/www.artsjournal.com\/worth\/2016\/03\/no-more-pocket-versions-of-to-kill-a-mockingbird\/","url_meta":{"origin":1683,"position":1},"title":"No more pocket versions of To Kill A Mockingbird","author":"Michael Rushton","date":"March 14, 2016","format":false,"excerpt":"The estate of Harper Lee has decided to end its relationship with Hachette publishers, which was licensed through HarperCollins to produce a mass-market paperback edition of To Kill A Mockingbird. HarperCollins will continue to produce a trade paperback version. See these reports from The New Republic and The Guardian. Since\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"Boo","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/03\/harper-lee.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/03\/harper-lee.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/03\/harper-lee.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":522,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/03\/on-google-and-why-price-discrimination-is-good-for-consumers\/","url_meta":{"origin":1683,"position":2},"title":"On Google, and why price discrimination is good for consumers","author":"Michael Rushton","date":"March 25, 2013","format":false,"excerpt":"Paul Krugman writes about the decision by Google to shut down Google Reader. Whatever your thoughts on the good or evil nature of Google, he raises an important issue for thinking about price discrimination: there are cases where, if no price discrimination is possible, such that the seller can only\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"need to price discriminate","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/03\/Krugman-price-discrimination-300x171.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":504,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/03\/a-primer-on-price-discrimination\/","url_meta":{"origin":1683,"position":3},"title":"A primer on price discrimination","author":"Michael Rushton","date":"March 20, 2013","format":false,"excerpt":"My previous two posts dealt with different aspects of price discrimination, and since many future posts will cover the topic from various angles, I think it worthwhile to go over a few basic ideas and definitions. Marginal cost will be defined here as the cost to your arts organization of\u2026","rel":"","context":"In \"direct price discrimination\"","block_context":{"text":"direct price discrimination","link":"https:\/\/www.artsjournal.com\/worth\/tag\/direct-price-discrimination\/"},"img":{"alt_text":"who knows their reservation prices?","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/03\/audience-300x300.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2876,"url":"https:\/\/www.artsjournal.com\/worth\/2023\/05\/indirect-price-discrimination-in-theatre-seats-books-and-mummies\/","url_meta":{"origin":1683,"position":4},"title":"Indirect price discrimination in theatre seats, books, and mummies","author":"Michael Rushton","date":"May 11, 2023","format":false,"excerpt":"When arts presenters set prices, they know that there are some customers willing to pay top dollar for the highest quality offerings - the best seats in the house - while there are other potential customers who might have an interest in attending the show, but only at a lower\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/05\/image.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/05\/image.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/05\/image.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/05\/image.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/05\/image.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/05\/image.png?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":1801,"url":"https:\/\/www.artsjournal.com\/worth\/2015\/01\/the-benefits-of-price-discrimination\/","url_meta":{"origin":1683,"position":5},"title":"The benefits of price discrimination","author":"Michael Rushton","date":"January 20, 2015","format":false,"excerpt":"An interesting piece in The Guardian today on the design and pricing of seating in theatres, that the efforts to make all seats 'good' seats has made it more difficult for those on a budget to attend performances. Iain Mackintosh writes: We need to unravel the connection between seat prices\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"good seats bad seats","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2015\/01\/globe-theatre-london-16.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2015\/01\/globe-theatre-london-16.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2015\/01\/globe-theatre-london-16.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2015\/01\/globe-theatre-london-16.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2015\/01\/globe-theatre-london-16.jpg?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2015\/01\/globe-theatre-london-16.jpg?resize=1400%2C800&ssl=1 4x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/comments?post=1683"}],"version-history":[{"count":5,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1683\/revisions"}],"predecessor-version":[{"id":1692,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1683\/revisions\/1692"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media?parent=1683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/categories?post=1683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/tags?post=1683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}