Lady Gaga Says $0.99 Albums Make Sense, Especially For Digital

Business Models

from the understanding-how-this-works dept

You may have heard that Amazon did a deal recently with Lady Gaga, in which it offered up her entire new album for $0.99. While Amazon did have some technical difficulties in making this work, it resulted in some mindless criticism, in places, that Gaga was “devaluing” her own work. We hear this argument all the time, when it comes to free music, as well — where people suggest that giving away music “devalues” the music. This shows a fundamental misunderstanding of the difference between price and value. Just because something is cheap, it doesn’t mean that the value is diminished.

In an interview with the Wall Street Journal, where Lady Gaga is asked directly about this issue, she almost seems offended, and notes that, especially when it comes to digital, pricing an album at $0.99 is perfectly reasonable, since it helps spread the music. After being asked if she thought her album was “worth” more than $0.99, she emphatically replied:

“No. I absolutely do not, especially for MP3s and digital music. It?s invisible. it?s in space. If anything, I applaud a company like Amazon for equating the value of digital versus the physical copy, and giving the opportunity to everyone to buy music.”

This isn’t too surprising, given Gaga’s previously stated views on her use of free to get her music out there, as well as her encouragement of people to download unauthorized copies. However, it’s nice to see her make this point again.

Now, to be fair, she also notes that Amazon covered “the difference” with these albums as part of a promotion — meaning that she (well, her label) got more than $0.99, but that’s a separate issue than the whole question of the “perception” from giving away the music at such a low price.

Later in the interview, she makes another point that we’ve been making for a while, which is that record labels certainly make sense for some people, but the exciting thing today is that you don’t “need” the label any more. She points out that she certainly needs her label, which is great, but that many artists don’t need to go that route, saying, “not everybody needs a record label” any more. She also points out that the really valuable thing she’s done is build a really strong connection with her fans, and it’s that kind of authentic connection that makes her audience so valuable. These are all points that plenty of us have been making for years, and it’s great to see such a prominent musician making the same points.

Filed Under: business models, economics, free, lady gaga, music