Another Records Company Model: Part III

The catalyst for all this talk about how records are made and the business behind them was prompted by a discussion I had recently with Paul McGowan at PS Audio. PS Audio and a couple of collaborators are producing a compilation of previously recorded high quality tracks. I can’t say that I know the exact provenance of the tracks but I’m pretty sure that they were well recorded in high-resolution…either at 92 kHz/24-bit PCM or on a Sonoma Multitrack System at DSD 64. I heard several tracks from the project and they sounded really good…if a little inconsistent. Paul told me they’re working on pulling new mixes together and Gus Skinas will be mastering the whole set…so I’m sure the tunes will fall together quite nicely.

“PS Audio plans to issue two discs in the package. According to Paul’s post of March 6, 2015, “Inside the physical media package will be two discs: a CD and a DVD. The CD will contain perfectly mastered copies of the original high-resolution files. The DVD will contain both the original master DSD recordings as well as 176/24 PCM versions, so each package has three formats from which to enjoy, all mastered expertly by Gus Skinas on his system and curated and checked for final results in Music Room One on the IRSV.”

The pricing and deal structure of Paul’s model goes something this, “The model of distribution and reimbursement will be very different. In this version we will sell the discs around the world ourselves without going through dealers, for $39.95 each. After covering the physical costs of the package itself as well as its fulfillment (figure about $10) the balance of $30 is split 80/20, with 80% shared between the musicians and the recording people that made and funded the studio and mastering time. 20% will go to PS Audio, the distributor and marketer, with the hopes of making enough money to repeat the process and make more. This is not a money making venture for us, rather, we want the lion’s share to go where it belongs, in the hands of those that make the music.”

So that we can get a handle on the economics of selling a $40 retail item (directly without and middlemen), let me breakdown some typical costs associated with replicating discs. CDs are ridiculously cheap… I pay $.21 for each one. This is just the cost of the raw disc no packaging…although it does include the cost of the silk-screening. The setup cost for the screens is about $40. And a DVD? They don’t cost that much more than CDs…around $.40. Throw in a nicely laid out 16-page booklet and cover with 4-color art, a plastic box of some kind, shrinkwrapping and the total cost of each package comes to about $1.75. The cost of replicating optical discs and printing paper are really pretty cheap.

To be continued…