"Notes from the Underground" by Nicholas Thompson, in The Washington Monthly (Sept. 2003), 733 15th St., N.W., Ste. 520, Washington, D.C. 20005.
It's no secret that the music industry has been ailing lately: Revenues from sales of recorded music were down by 15 percent over the last three years. The industry blames young people who download copyrighted music for free from file-sharing networks, and is doing its best to stop them. But instead of fighting technological change, says Thompson, industry bigwigs should take a few pointers from him, a successful young subway musician.
Since releasing his new album in January 2003, he's sold about 500 CDs in the New York subways. Playing his Taylor acoustic guitar underground every few weeks, he's made more money per hour than he does as a journalist. To succeed, though, he's had to study his environment.
"When I first started playing in the subways, I experimented with different prices for my albums. The sweet spot seemed to be a price of $5." His conclusion: That's what people will pay for a CD with music they like by a musician they never heard of. "So why does the average CD sell for more than $17?" It's not the manufacturing cost: Thompson's latest album cost only $1.10 per disk. Lesson 1 for the industry: For albums by artists other than the Rolling Stones or U2, which aren't going to sell millions of copies, stop paying so much to marketers and other middlemen, and cut prices. …