ORIGINALLY POSTED DECEMBER 2005, but now relevant thanks to the iTunes ringtone hacker store situation
The value proposition of a media artifact is inversely proportional to the level of abstraction applied by its transmission mechanism.
When I was at UCSB, I lectured a significant amount on the fact that with the movement toward an exclusively digital media-scape, the differences between media types are dependent not on formative properties, but on context and reconstruction. To give an example, the difference between a book and a newspaper happens at the core foundational level. Before content is even considered, each is on a path toward being distinct media (I’m speaking post-plate here). With digital media, the difference between media is not at the core — because of the absolute reductivity into binary — but instead at the level of context and representation.
An MP3 and webpage are formatively the same thing, but in representation extremely distinct. While you can read an Mp3 and listen to a newspaper by viewing the binary through alternative mechanisms (open an Mp3 in VI, or run the binary of a webpage through an audio-tap), you wouldn’t want to. The signal gets degraded to just noise as the context is not suited to the content.When given a lack of differentiation then between formative content, the primacy of the artifact itself is relegated to only the situation that enables representation rather than an object of representation itself. What this means is that an Mp3, a webpage, a photo, etc is indicative of something that can be represented, but as an artifact, it only exists as a braketed data source, not something tangible, intrinsic or immutable.
Ascribing value to a tangible artifact is easy in the sense that even outside the physiological aspects of production (the artist, craftsman, etc), there is the manufacturing cost, material cost and the requisite costs of the independent systems which enable the causal chain leading up to Artifact to happen. When itemized, even outside the cognitive valuation, an analog artifact directly correlates to a monentary value exchange.With digital media of course, the value of the artifact is less tangible and hence harder to quantify. How do you “value” a piece of data? Do you value it before or after reconstruction and representation? That is to say, is a FairPlay AAC file from the ITunes Music Store of value as data, or only of value in conjunction with a device that can play it (iTunes/Ipod)? Is the value of an image, say a stock image, the raw pixel data or the image itself? Are we paying more for more accurate representation (higher bitrate, higher resolution) or a better represented product?
The real question is: how do we equate abstraction with value?
This can be taken to mean, does the value of a digital artifact vary with the degree to which the artifact is abstracted?For an example, lets take a ringtone vs. a protected M4P file from iTunes. The song? Aftermath, by R.E.M. (as its a ringtone I bought last evening).The ringtone for Aftermath cost $2.50 dollars for a 90 day expiring license on Sprint. The ringtone is 15 seconds long, and is one of the choruses from the song. The entire song is 3:53 mins long, equating to 233 seconds. At $2.50 dollars for the ringtone, that means the entire song would cost $38.83. By contrast, the entire song on iTunes Music Store is .99 cents. Or for an Mp3 ripped from a CD, figuring that there are 13 songs on the record, and a record cost $11.99, that is .92 cents for the song?What accounts for a difference of near $38 between the 15 second ringtone and the .99 or .92 song?Simple: abstraction of the data that constitutes the song. This goes back to the first statement:
The value proposition of a media artifact is inversely proportional to the level of abstraction applied by its transmission mechanism.
In relation to a ringtone and an Mp3 then, this means the following: a ringtone is valued higher because the data more closely resembles an analog artifact. Its method of representation is so restricted, that even though it is digital data, it equates more to analog in that the possible choices for transmission mechanisms are limited on a strict basis to certain devices (phones). Thus the level of abstraction for the digital data is low, as abstraction implies choice and fluidity in the network from source to representation. The value proposition therefore is high, while the level of abstraction is low.With MP3’s and AAC’s (more for Mp3’s), the level of abstraction for the data is much higher. An unprotected Mp3 has such a fluidity of representation that the primacy of the data is diminished as the possibilities for recontextualization increases. By allowing an Mp3 to be represented in so many fashions (aurally, visually and even haptically), the primacy of the original artifact is reduced from an object of creative expression (music) to more a collection of data that can be represented as music if so desired, but also recontextualized in other fashions just as easily.
The abstraction of the data then is high, as it is entirely dependent on individual choice rather than lock-in for its representational framework.With high abstraction then comes low value proposition, as the power of the data is diminished through its lack of forcing of strict adherance to its own desired representational framework (like a ringtone). By allowing individual choice then, value gets diminished as the onus for half the media equation (representation) is on the user, not the media artifact itself.So for an MP3, it is .92 cents (or free for most kids) because of its relative abstraction as a piece of data, while a ringtone in the same equation is nearly 40 dollars because its strict media framework relegates it more toward a locked in analog artifact than a piece of digital data agnostic to final representation mechanisms.
Does this explain why a kid will spend hundreds on ringtones and nothing on music?
I think it does, and I see this personally applied to other media besides music, and even other circumstances. It is hard to quantify the value of data when the onus is on myself to make that data relavent to my own consumption desires. It is easier to ascribe value, and easier to spend the money when I know that the purchase of the data does not subject me in any way to dictating its use. It equates to convinience, but more I think it equates to giving people the knowledge of the abstract nature of data (as Mp3’s, photos, etc do), or hiding that abstraction from transmission to representation in order to equate the piece of datas value to the value of the device doing the representation.
This serves then to explain other situations:
- Why do we watch movies in theaters?
- Why do we still buy magazines, but not newspapers?
- Why did Apple need a video iPod to sell videos on iTunes en masse?
- Why are consoles still more popular than playing games on computers?
- Why are Apple’s better than PC’s, according to the evangalistic meme?
- Why does Just In Time manfuacturing products cost less at times (think Scion)?
Here is the quation then:
Value ∝ 1/Abstraction
I’d love to hear comments on this. I plan on lecturing on this at UCSB on October 28 for the Art 1A class.
With high abstraction then comes low value proposition, as the power of the data is diminished through its lack of forcing of strict adherance to its own desired representational framework (like a ringtone). By allowing individual choice then, value gets diminished as the onus for half the media equation (representation) is on the user, not the media artifact itself.
… hence the reason DRM is attractive to media companies? The more tightly you can reduce abstraction of data (ie. to a single device), the more you can charge for it?
Yes, I would probably throw in device talk. I am unlikely to buy any ringtone downloads because it would be cheaper for me, reasonably techno-media-savvy, to rip and cut the track then transfer it to my phone (plus I don’t want to have any contact with those ringtone numbers, who will only try and lock me into expensive subscriptions). That equals freedom across devices.
But for those who cannot do so, we might say that the publisher is making things easier for the customer, a simpler way to get music on their mobile. When you remove labour, you can charge for the benefit accrued by your proponents, right?
October 28? or November 28?
Two possible alternative theories:
1) Value is perceived effort expended. A ringtone is worth more than a single, because to get a single playing I only have to pop it into my CD player. To get from there to a ringtone, I would have to select out the best part of the song and encode it into a ringtone format (which, assuming I am an average joe, I don’t really know how to do - IF my network even lets me).
You could say value is just effort expended, but it’s not that simple. A lot of people think bashing out a hit single is a straightforward operation.
2) A big motivator for spending money (disposable income, at least) is to show off to our friends. To make a public display of our wealth (by public, I mean to friends, not so much strangers). Hence why we pay premiums for great cars, great houses, for ringtones and faceplates for our mobiles. More show-off = more value.
Traditional music has become increasingly private. In a digital age, it is pumped to our ears via our iPod headphones and it is stored privately on our computers. As others have lamented and remarked, gone is the day when your music taste was on public display via a rack of CDs or vinyl records.
(I prefer the second one, personally.)
SpiderMonkey’s alternate theories are both compelling, especially the first one. I’m not knowledgeable about ringtone mechanics, but if (when) it’s easily hackable, licensed ringtone sales will no do doubt plummet.
I’d also argue that consumers consider ringtones and “music for listening” to be conceptually different and that they’re using “mental accounting” to create separate, perceived cash pools for their purchases in each category. The absolute number of ringtones you might desire within a year is much smaller than the number of songs you might want to own. Hence, you can pay $2.50 for a ringtone ringtones and still keep your annual cost quite low. Even at $7.50 a ringtone, you could buy one a month and keep your annual outlay under three figures. But an active music consumer will purchase dozens (if not hundreds) of songs each year (assuming, for the sake of argument, that free alternatives are not available). Hence, the cost per song MUST be lower for song downloads than ringtones, even though ringtones are shorter than the songs themselves. I think the 99 cent model is pretty much the maximum the market will support. And that’s still too expensive when you consider the sound quality of all legal downloads is much worse than that of a standard CD. The eMusic model, which prices out around 25 cents a song, seems to be a fair cost-per-song when sound quality is considered.
Nice article, but I would be very careful with that last list - after showing what I’d call a decent level of objective analysis, you’ve lapsed into opinionated ‘fact’, as has been mentioned by another reader.
Perhaps a recording of the lecture? I’d love to listen to it, this is a very interesting topic.
Well yeah, the Mac/PC argument is opinion, but it is also kind of a quantified meme as well, which for me is more interesting than personal opinion regarding platform. I meant it to be a bit polemic though.
For the record’s sake, the “Why are consoles still more popular than playing games on computers?” thing is very much an opinion expression too. The implication is that you believe that in the past consoles have been more popular than PCs and that you expect them to get less popular. If you look at sales figures (and I apologise that I don’t have any to hand), the opposite is true. PC sales peaked around the turn of the decade and have been in significant freefall this generation of consoles, publishers find consoles to be a much more profitable platform and countless PC-only developers have switched to producing console games in the past 5 years.
Does this explain why a kid will spend hundreds on ringtones and nothing on music?
no … its much simpler
kids will pay a premium for personalization not for entertainment
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[…] The $39 Dollar Song and 6 Cent Ringtone didn’t really light up the charts on the TechMeme saturated blogosphere, but it is a valid discussion to have, especially when the business of content is exploding as it is (to use Jeff Jarvis’ parlance). […]
[…] The $39 Dollar Song and 6 Cent Ringtone didn’t really light up the charts on the TechMeme saturated blogosphere, but it is a valid discussion to have, especially when the business of content is exploding as it is (to use Jeff Jarvis’ parlance). […]
People will pay for ringtones and mobile content, because they have always had to pay for mobile content. People will rip off music through P2P file sharing becuase they have always fdone this.
Full track downloads to a mobile will be twice as expensive as full track downloads to a PC!
[…] Apple iPhone Signals Death of Ringtone Industry - Blackbeard SEO: may I point to this article I wrote on the transient nature of the ringtone market and how its exploitive of ignorance and control rather than any market imperative? You can skip to the end and leave a response. Pinging is currently not allowed. […]
[…] But I couldn’t agree more. I sympathize with this user; and users to follow. Music is music; whether its in your iPod, phone or played when your phone “rings”. What really differentiates mp3 music from a ringtone? Seems to me it is mostly price, delivery, size (smaller) and quality (lower). Basically, a ringtone costs much more than a full track download on a per second cost analysis. Why should anyone who downloads a full track need to purchase a corresponding ringtone? (Because the cellcos want you to!) […]
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Sorry to see all the Blog Spam, but to get back on point.
I agree with many of your points as to abstraction but as others have commented you may be committing a logical fallacy. There are many factors that cause the price of ringtones to be so high.
1. Quantity
People buy fewer ringtones than singles. Their yearly expenditure is much less than it is on CD and MP3/AAC tracks.
2. Closed Market
Since the carriers tightly control the network and devices there is little competition.
3. More Agents
In iTunes there are two primary agents. The label and Apple. It’s a two way split. In the ringtone economy there are three or more. The content provider (Jamster), the carrier, and the label. Imagine if Apple had to pay Comcast every time I downloaded a track.
4. Other Options
Apple has to compete against all the major CD retailers and the smaller (in market share) MP3 retailers. As well as the ‘free’ option of P2P networks. Most users don’t want to spend the time to rip their CD/MP3 to a ringtone for the savings.
5. Social Status
The ringtone is more closely related to social status than the music on your iPhone. It’s a way of outwardly sharing your social context.
And of course there are other reasons for the arbitrage profits being made in ringtones. It’s one more example of why you can never achieve a perfect free market.
Both SpiderMonkey and David Harrell have, I think, hit the conceptual nail. The ringtone market exists entirely because of a onion’s worth of abstraction layers, so that being able to play music when a phone should ring seems like digital voodoo.
Once consumers begin to understand these abstractions and incorporate this into their thinking (or a tool that does this for them becomes popular) the ringtone market will be an odd footnote in the history of digital music.
The ringtone market exists because cell-phone makers and service providers find these abstractions profitable, but devices (such as the iPhone) with good interfaces will make these abstractions more transparent and consumers will revolt.
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[…] No, its because profit margins shrink when routing IP traffic through monopolized networks. Its kind of basic ECONOMICS. IP traffic over wi-fi = competitively routed, device agnostic. IP traffic through cell phone networks = monopolistic. Do you think monopolistic tendencies also lead toward revenue splits that aren’t in the favor of artist/recordco? Indeed. Its why you have a 39 dollar song (ringtone extrapolated) vs. a 6 cent ringtone. […]
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yeah, Dries, what's with that?
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So why couldn't a loosely coupled, queue based system using XMPP work as a twitter clone? Hash table lookups for @replies, a good OSPF type routing table for interserver communication and asynchronous messaging propagation. Lets get cracking!
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[From -- R.E.M. HOLLOW MAN --]- #
Bill Gates = a personal hero. I love this e-mail. Microsoft is also a case of spreading things too thin.
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- Full text: An epic Bill Gates e-mail rant
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