Paul McCartney, Sting, Elton John and Avril Lavigne and questions about pricing

As a student of marketing, I am fascinated by how product pricing influences consumer behaviour, and my love of music led me to a search on iTunes over the weekend which prompted me to make a few interesting observations.

I was considering downloading five albums:

• New and Kisses On the Bottom by Paul McCartney
• The Last Ship by Sting
• The Diving Board by Elton John
• Avril Lavigne by Avril Lavigne

Paul McCartney, Sting and Elton John have been around for donkey’s years, and I’m excited that they have all released new material recently.  Avril Lavigne shot to fame with her début album Let Go when she was only 17 in 2002, having appeared on stage with Shania Twain at only 15.  Fresh from her marriage to Nickelback frontman Chad Kroeger in July, she has also released a new studio album.  Since I have all her four previous albums, I’m keen to complete the collection.

It’s amazing that even after all these years, Paul McCartney is still able to churn out material that sounds relatively fresh, and his New album has received decent reviews.  Kisses On the Bottom is a collection of old songs from the 40s and 50s that McCartney apparently grew up with, but he surprises us with a new song he wrote in the style of the oldies called “My Valentine”, in which Eric Clapton is said to have a hand.

Sting was the lead singer for The Police for many years, until he ventured on the solo path in 1981.  His musical detours in recent years include an experiment with the music of English composer John Dowland, who predated baroque composers Henry Purcell and Vivaldi.  In 2009, he released a studio album If On A Winter’s Night featuring 14^th century carols and tunes by Bach and Schubert.  The Last Ship plumbs the depths of pain felt by those caught up in the demise of the local shipping industry.  Yet my favourite is a real softie unrelated to the album’s theme called “Practical Arrangement”.

Avril Lavigne, on the other hand, has gone back to her rock ‘n’ roll roots with an attitude. I love the way she says “…What if you and I/Just put up a middle finger to the sky/Let them know we’re still rock ‘n roll…” in "Rock And Roll" from her latest album.

As I surveyed the albums by iTunes, I discovered that New, The Last Ship and The Diving Board are available in both deluxe and ordinary editions.  Typically, the deluxe edition has a few bonus tracks and costs more.  Yet, all deluxe editions are not created equal – some are at a higher premium to the ordinary edition than others.  If you buy the entire album, deluxe New is 16.7% more expensive, but you do get 16.7% more tracks; similarly, deluxe The Diving Board is 25% more expensive for 26.7% more tracks.  The Last Ship is a real bargain, as it gives you close to 42% more tracks, but costs only 25% more, which means that per track the discount is close to 12%.

All five albums offer two download options for both editions: by album or by selective track, with the latter being more expensive per track than the former.  If you download the entire deluxe New album, you pay 22.5% less per track, but if you do the same for The Diving Board, the discount is almost 40%.  In the ordinary edition, the discount in the album rather than by track download is steepest for Kisses On the Bottom – a whopping 61.3%; New and The Last Ship offer the smallest discount of 22.5%.  Individual track downloads cost US$1.29 each,  standard across all albums and editions.

Assuming you download the entire album, New is most expensive among the deluxe editions,, at US$1 per track, whereas The Last Ship is the cheapest, at US$0.79 only, as the latter has 19 tracks compared with the former’s 14, or almost 36% more.  Does this mean Paul McCartney is able to command a higher price than Sting?  Not really, as in the ordinary edition, Kisses On the Bottom is half of the price of New per track, but Sting is the next cheapest, at US$0.80.

If you look at the total amount of cash you have to fork out to download the albums, Kisses On The Bottom will set you back only US$7.99, but New, The Last Ship and The Diving Board cost a standard $11.99; Avril Lavigne is in between at US$10.99.

If you’re interested in the detailed comparisons, the following table gives you a snapshot:

The above comparison touches on many questions we often come across in pricing a product:

• How much should we charge for a product – what is the cash outlay we believe a consumer is prepared to pay for it?  Why does Paul McCartney charge a lot more for New than for Kisses On the Bottom?  Why are Paul McCartney’s New, Sting’s The Last Ship and Elton John’s The Diving Board more expensive than Avril Lavigne’s eponymous work?
•  How many variants should we offer, and what sort of discount or premium should we charge for one versus another? Why does Avril Lavigne not offer a deluxe edition of her album, nor does Paul McCartney his Kisses On the Bottom?
• Does our brand deserve a premium against another brand, or can do we need to sell ours at a discount?  Why is Avril Lavigne’s album 8% cheaper than any of the others, but contains more tracks than some and less than others? 
• If we offer different sizes of a product how much more should we charge for the larger volume version?  Can the incremental cost justify the incremental value?  Should we offer a discount for the larger volume, and per unit of measure how big should the discount be?  Why does Sting offer a bigger discount per track for the album download than Elton John?  And why does Paul McCartney charge the same per track for both the deluxe and ordinary editions of New, irrespective of whether you download only a few tracks of the entire album?

In the end I downloaded the entire Kisses On the Bottom, The Last Ship and Avril Lavigne albums.  It didn’t make sense to download a few tracks at a substantial premium, as I have a predilection for owning full albums anyway.  I previewed New and The Diving Board and withheld purchase – I wanted to think more about whether I should pay 50% more for New than for Kisses On the Bottom.  All my downloads were of the ordinary editions, as I didn’t believe the bonus tracks in the deluxe editions justified the additional spend.  In other words, I didn’t believe the incremental value I would derive from the additional tracks was commensurate with the incremental outlay.  I didn’t buy all five albums as the three I did buy cost US$31, about the amount I was comfortable spending that day.

I have now finished listening to all the albums I bought, and am very happy with my purchases.  It’ll be interesting to see whether, in time, I decide to buy New and The Diving Board as well.

The links below will take you to the iTune pages for the various albums mentioned in this post:

Paul McCartney New

Deluxe edition

https://itunes.apple.com/us/album/new-deluxe-edition/id694874649

Ordinary edition

https://itunes.apple.com/us/album/new/id719309865

Paul McCartney Kisses on The Bottom

Ordinary edition

https://itunes.apple.com/ca/album/kisses-on-the-bottom/id498335263

Sting The Last Ship

Deluxe edition

https://itunes.apple.com/us/album/the-last-ship-deluxe-edition/id683669242

Ordinary edition

https://itunes.apple.com/us/album/the-last-ship/id683720529

Elton John The Diving Board

Deluxe edition

https://itunes.apple.com/us/album/diving-board-deluxe-version/id662011790

Ordinary eidtion

https://itunes.apple.com/us/album/the-diving-board/id662004721

Avril Lavigne Avril Lavigne

Ordinary edition

https://itunes.apple.com/us/album/avril-lavigne/id709875516

Spam is not always this amusing…

For those of you old enough to be around before personal computers became a permanent fixture in everyday life, spam had a different meaning.

In 1937, the Hormel Foods Corporation introduced a meat product called “Spam”, which is still available today.

According to the Oxford English Dictionary, the origin of spam is apparently an abbreviation of “spiced ham”.

As the Internet started to take hold of our lives, the word became a pariah in polite company, taking on the meaning of unwanted electronic messages sent to a large number of recipients at the same time.

This modern usage of the word “spam” is said to derive from a sketch from the British comedy Monty Pyton set in a café in which every item on the menu is spam.

In 1975, the Monty Python comedy team produced a movie called Monty Python and the Holy Grail.  If you’re interested, you can watch it here.  The movie further spawned a Broadway musical in 2005 called Spamalot, which claims to be “lovingly ripped off” from the movie.

Most of us are not amused when we receive spam, which often jams our mailbox and prevents us from getting to the genuine messages of importance, but I’ve recently received a message from one Pandit Vikram, who claims to be “in charge of Sovereign Wealth Funds” in Citibank.  You may recall that no so long ago, a gentleman by the name of Vikram Pandit was CEO of CitiGroup.

The fun doesn’t stop here.  Mr Vikram promises that he can arrange an interest-free grant to me of US$10.5 million, which “will stay on CitiBank Books for 36 months” and then written off.

Mr Vikram goes on to say that Sovereign Wealth Funds in his charge usually remain dormant for years “because some leaders of the United Kingdom who made the initial deposits intended to steal the funds after leaving office”.

Unfortunately, Mr Vikram says, these depositors “are either kicked out or killed in office”.  That’s why, he continues, the funds “go into dormant mode”.

And what does this privilege of an interest free grant (someone needs to prompt Mr Vikram to look up the word “grant” in the dictionary) cost me?  40% of the US$10.5 million, apparently.  This is how much of the “grant” I need to “set aside” for Mr Vikram.

What am I to do?  I need to send Mr Vikram all my personal details and a scanned copy of my “identity”.

If you’re interested in having your identity stolen for US$6.3 million (60% of $10.5 million, after setting aside 40% for Mr Vikram), please let me know and I will give you his personal email and telephone number.

Spam on…

The Philadelphia Orchestra ends its Fortieth Anniversary China Tour with Wagner and Brahms in Macao

June 9th, 2013
Venetian Theatre, Macao
Richard Wagner	Overture to Tannhäuser
Johannes Brahms	Symphony No. 2 in D Major, Op. 73
	Allegro non troppoAdagio non troppo Allegretto grazioso Allegro con spirito
The Philadelphia Orchestra
Conductor: Donald Runnicles

A casino is an unlikely venue for an orchestral performance, and it’s a mystery why the Philadelphia Orchestra chose to stop at the Venetian Theatre on its 2013 Residency and Fortieth Anniversary Tour of China.  In 1973, at the request of President Nixon, the orchestra had been the first to perform in China upon the establishment of diplomatic relations.  According to an article in the New York Times, nine players in the orchestra today were apparently on the first tour.  For them, the two-week visit must bring back fond memories of a very different China.  Conductor Donald Runnicles hit a nostalgic nerve when he talked about how members of the orchestra were about to go their separate ways the next day after two weeks of bonding.

The Venetian Theatre is a grand auditorium, probably a hundred feet from floor to ceiling, with plush seats found in modern movie theatres rather than concert halls.  I can imagine the chandelier in Phantom of the Opera having a field day sliding all the way from the middle of the hall to the stage.  Yet its acoustics are unkind to a symphonic orchestra, the combined effect of a flat hard ceiling and plenty of empty space creating delayed reverberations.  This created a cushion effect on the music, sometimes even muffling it.

Call him a serial philanderer, bigot or megalomaniac – for he was probably all of these – but there’s no denying that Richard Wagner possessed a vision which drove him to write operas on a breathtakingly gargantuan scale that bowl over even the most disinterested concertgoer.  His oeuvre is more than enough for a lifetime’s study, and I have long given up the quest to understand the complex Ring Cycle.  Yet the overtures to many of his operas are gems of orchestral grand gestures and expressive languor.  

The Overture to Tannhäuser is a case in point.  The opening chorale on clarinets, bassoons and horns, in a sustained murmuring tone, develops into a hauntingly lyrical passage on strings.  An interlude on woodwinds blossoms into a majestic brass flourish underpinned by insistent triplets on strings.  Scurrying string dashes pave the way for more march-like grand gestures, before a period of pensive placidity sets in with sprinklings of solo violin.  All the trappings of the orchestra then converge to bring the overture to a climactic close in a flurry of nervous energy.  In a nutshell, the music captures the story of Tannhäuser’s entrapment by Venus, and his odious behaviour which ruptures any hope Elisabeth may hold for his love, causing her to die of despair.

Sitting in the front row, I heard the strings and woodwinds with crystalline clarity.  The delayed echo in the hall softened the sharp edges and made the strings sound quite lush.  Unfortunately, the brass section at the back became second cousins and was hardly able to flex its usual muscles in bringing out the chest-puffing and tear-swelling grandeur so characteristic of Wagner.

Compared with his first symphony, which took a decade and a half to complete, Brahms’ Symphony No. 2 in D was a relatively painless composition, which he finished in four months.  Unlike the first, its bucolic sentiments give it lightness not typical of his works.  His approach to music is diametrically opposed to the wanton romanticism espoused by Wagner.  As the cellos and horns at the opening die down, a quiet passage gives way to a boat ride down the undulating river on strings tutti.  Many have pointed to the similarity of the material in the first movement to the lullaby from his Op. 49, exposing a childlike appreciation of nature.  The second movement is restless but not depressing, peaceful but not lethargic.  Pizzicato cellos and a lilting oboe in the third movement introduce a light skip around the fields, while the fourth movement sounds like a locomotive cranking up speed as it leaves the station.  Brahms eventually throws everything and the kitchen sink into the mix in a race of frenetic energy to close.

In contrast to the Tannhäuser Overture, the strings in the Brahms symphony seem to have lost a little lustre.  The woodwinds continued to shine, while the horns and trombones emerged from obscurity.  Maintaining Brahms’ stately character, Donald Runnicles nevertheless brings out the lighter moments with panache, driving the strings to near breaking point to a triumphant close.

Concluding a relatively short programme, the orchestra played the brief Prelude to Act III of Lohengrin, with sprightly brass in full blast from beginning to end.  With smiles of satisfaction, the Philadelphia Orchestra bid China farewell by betting that their performance of Wagner and Brahms at the Venetian Theatre would leave indelible memories, and they did.

James Rhodes holds court in soiree at the China Club in Hong Kong

When James Rhodes holds court in a soiree billed as “An Unconventional Recital” at the China Club in the Old Bank of China Building in Hong Kong, we are entitled to expect some fun.  And we were not disappointed last night.

As we seated ourselves in the dining hall cleared for the evening, Club founder Sir David Tang expounded his views on how concerts should last no more than an hour, and promised the evening would start promptly at 7 pm and finish at 8 pm.

On the dot at 7 pm, James strode into the hall and, instead of chatting about what he was going to perform – a practice which has become his trademark – he went straight to the piano and started playing a piece by Rachmaninov (the Prelude in C sharp minor, I think) – an  item not on the programme – with electric intensity.  He explained that he had “Rachmaninov” tattooed on his arm in Cyrillic, which could well say “Elton John” for all he knows.  Down-to-earth, charming and your regular guy next door: that’s what James Rhodes is all about.

Most of us think of Beethoven as the angry deaf composer.  Yet barely out of his teens he had been nearly beaten to death by his alcoholic father.  He single-handedly took classical music into the romantic period with a “big R” – for the first time, here was someone writing not for the church or the state, but for himself.

Beethoven’s Sonata No. 15 in D major, Op. 28, “Pastoral”, is an odd work.  Almost halfway through his 32 sonatas, it marks the crucial point at which he became convinced he was going deaf.  Yet the work shows no obvious depression, nor is it given over to much brooding.  The four movements are hardly distinguishable, running more or less into each other, linked often by material that keeps re-appearing in different guises.

James Rhodes’ interpretation was polished, subdued and exploratory; the left hand gently tapping a persistently repetitive rhythm, while the right scaling the sounds of nature.

For someone whose works remain stubbornly in play throughout the world, Chopin was apparently not a very nice person, ruined by a disastrous relationship with George Sand.  His Scherzo No. 2 in B-flat minor is the more popular among the four he wrote.  The signature opening of the work consists of quiet arpeggios followed by emphatic chords.  The rest then flows mellifluously in roller-coaster fashion.  In James’ hands, the Scherzo sounded warm and friendly, but a little staid, as if he was trying too hard to de-romanticise it.  I heard a few extraneous notes too.

Responding to our clamour for encores, James surprised us with what sounded like Beethoven’s Colonel Bogey Dudley Moore used to mischievously play, except I think he added snippets of the “Moonlight” Sonata towards the end.  Next up was an excerpt from Gluck’s Orpheus and Eurydice, a lilting work that hangs in the air like little water vapours, which he dedicated to Sir David.  To finish off, he served up a piece he claimed not to have played for a long time, a transcription by Liszt of Schumann’s Spring Night, one of 160 songs he composed during the year he courted Clara Wieck.

As we savoured the rapid outcry at the end of Schumann’s love song, we couldn’t help feeling grateful for Sir David’s generosity in bringing James to Hong Kong and opening the China Club specially for him on a Sunday night.  Most of all, we were proud to count James as a friend who happens to be an excellent pianist, rather than a virtuoso we put on a pedestal.