The Play to Pay Ratio

It looks like our accounting insights have more appeal than our music does, so we’re going to give the people what they want and go into a bit more detail!

We’ll be forever known as Uniform Motion, a promising indie band who gave up music for a career in accounting! Maybe they’ll add a new ‘Accounting’ category at the grammys and we’ll win it!

Just so everyone knows what we’re talking about, we released our new album One Frame Per Second, September 1st 2011, and wrote a short article on our blog detailing how much we would make from the various packages on offer (CD, Vinyl, PlayButton, Digital) and from a few of the digital music stores and streaming services. 

We didn’t mention how much it cost us to record the album, as we had recently written a post called ‘How to make a record on a low budget’ which laid down the costs associated with recording our music.

So let’s get to it.

Digital downloads.

We told you how much we earn when someone chooses to pay 5 euros ($7) for the digital download version of our album.

However, the average price people pay is actually 2.82 euro ($3.95) which leaves us with 2.21 euros ($3.09) after Paypal and Bandcamp fees.

The highest price anyone has ever chosen to pay is 20 euros ($28). The lowest is 0.50 euros ($0.70).

The key word here is ‘choose’ though. And that’s where it gets interesting. We did the math(s) and we found that for every 10 people who download our music for free (who choose to pay 0) 1 person will choose to purchase something from us (a CD, a Vinyl or Digital). 

Bandcamp also allows people to listen to all the songs on the album before they download them.

We found that for every 100 songs that were listened to on our bandcamp page, 1 person would purchase something from us. Funnily enough, this ties in with the number of visits to our website. For every 100 visits to our website, 1 person purchases our music. 

We are only talking about what happens in our own backyard here. We have no idea how many downloads of our music occur outside of bandcamp on filesharing sites. We can make an educated guess based on how many last.fm listeners we have but it would still be a guess.

Average price across all packages.

We offer different packages for our music ranging from CD’s, to Poster Packs (posters + download), to Vinyl, to PlayButtons, with prices ranging from 0 to 25 euro ($35). The average price we’ve been getting is 8.8 euros ($12.32) or 6.88 euros ($9.63) once bandcamp and Paypal have taken their share.

About 20% of our revenues come from digital downloads, 80% from physical packages. 

So if we factor in the costs of making the physical product, the average profit we get per purchase is roughly 4.68 euros ($6.55).

On average, to break even (recoup our production costs) we need 641 people to purchase something from us at that average price. Based on our ratio of 100 website visitors/song plays to 1 purchase, that means we would need 64,100 visitors, or songs to be listened to. Full disclosure - we’re probably not going to recoup this time round, but we are confident for the future.

Here’s why.

We’ve released 1 album per year since 2009. Each year, we double the number of visits to our website and the number of people who buy our music doubles as well.  In the interest of simplicity, I’m going to call the average purchase of 4.68 euros a ‘copy’. The concept of selling copies is still engraved in people’s heads so I think it will make more sense to explain it this way, but in reality, it’s an average amount per transaction.

2009 - 1st album: we sold 118 copies.

2010 - 2nd album: we sold 282 copies.

2011 - 3rd album: we’ve sold 225 copies so far. So reaching 564 copies is definitely possible. We may even reach 641 and break even this time. Who knows.

Let’s be conservative and say we will sell 500 copies.

So how long will it take us to reach a level that would allow us to quit our day jobs?

If we continue doubling our sales every year, surprisingly, it shouldn’t take too long! Well, that depends on how patient you are I suppose!

2012- 4th album: 1000 copies.  We break even and make a profit of 1,680 euros ($2,352)

2013- 5th album: 2,000 copies. We break even and make a profit of 6,260 euros ($8,904) 

2014 - 6th album: 4,000 copies. We break even and make a profit of 15,720 euros ($22,008)

2015 - 7th album: 8,000 copies. We break even and make a profit of 34,440 euros ($48,216)

2016 - 8th album: 16,000 copies. We break even and make a profit of 71,880 euros ($100,632)

2017 - 9th album: 32,000 copies. We break even and make a profit of 146,572 euros ($205,202)

2018 - 10th album: 64,000 copies. We break even and make a profit of 296,520 euros ($415,128)    

This is of course utter nonsense, just the rambling prose of an overly optimistic DIY musician! What I think it illustrates though, is that Rome wasn’t built in a day. The secret to success is perseverance. You just have to keep at it while controlling your costs and (trying to) make good quality music.

I’ll post our sales numbers every year for the next 7 years! We’ll see how it goes!