The Economics Behind Ghost Tunes

Garth Brooks recently launched the beta version of Ghost Tunes. The music download service is Brooks’ response to iTunes being unwilling to change their policies for anyone. With this new service Brooks’ promises to give artists as much control as they want with their music. So will it work?

There are probably more music download services out there then you’re aware of. Obviously iTunes holds the vast majority of the market share, with Amazon coming in a distant second. Then there are a bunch of other services that allow for the download of select music content, WalMart Music and Google Play being the two most well known. With Ghost Tunes entering the market it’s a fair question to wonder where it’ll find its place.

First and foremost, it’s never going to take over iTunes. There are too many people all over the world that have already started building sizable collections on iTunes for it to ever lose it’s appeal. When they hiked the price of individual songs from 99 cents to $1.29 and saw no measurable change in sales it became clear that iTunes had officially won the digital music battle.

With Amazon continuing to go after the likes Google and Apple they decided to put a more dedicated effort into increasing their digital sales. The unveiling of their cloud player (still the best on the market) allowed them to chop at Apple’s consistently buggy iCloud. Additionally, they offered hit songs for 69 cents and kept their individual song prices at 99 cents for longer than Apple did. However, they couldn’t keep those prices forever and so eventually the raised their prices to match Apple on nearly every song. Unable to beat Apple’s prices Amazon launched a new service in an attempt to steal some market share.

Amazon Prime Music is available to anyone with an Amazon Prime account. This function of Prime allows you to stream any song that is available on the Amazon Prime music catalog as many times as you want from any device you want for free with your Amazon Prime account. What sounds like a great idea on the surface has faced some issues. Their library simply isn’t big enough to convince users to switch from ad-based streaming services such as Spotify and Pandora Radio. Spotify built itself on offering nearly all of the same music as iTunes for free with ads and Pandora’s staple has been their music genome project that aims to create the perfect playlist. Without the same library as these services it’s difficult to envision Amazon ever taking over the streaming music market.

That leaves us with Ghost Tunes, started by Garth Brooks, who stated he wanted to give the artists (and their record labels) more power over what songs are available in what ways. For example, if an artist wanted to release an EP with their seven most popular songs they can do that. If an artist wants to bundle all of their released music together for one price they can do that too. Artists can even sell merchandise bundles with their music through Ghost Tunes. There’s no question that it’s a new way of selling music and one that on the surface appears to be appealing.

However, like all good things there are catches. Ghost Tunes library right now features slightly over 7 million tracks. That may sound like a huge number, but the 37 million songs available on iTunes makes it pale in comparison. A quick search of the Ghost Tunes library and you won’t be surprised to find that country reigns supreme. This isn’t necessarily bad planning by those at Ghost Tunes. Over the past two years country music has consistently been the best selling genre. If Ghost Tunes can even steal 50% of the country music market it’ll likely be profitable. But that’s a big “if”. By allowing songs bought on Ghost Tunes to be added directly into your iTunes library there’s a chance that people who go for Garth’s music will stay for other artists. Again, that’s a big assumption.

The fact of the matter is, when you’re listening to a song in the iTunes player it takes just a few clicks to purchase a song and have it directly added into said player. If you have multiple Apple devices the song you purchased can now be added to any device in seconds. That’s something that Ghost Tunes is never going to be able to offer. Instead they’ll likely look to push the bundle feature. Something that is entirely unique to them and something that iTunes will never offer, simply because there’s no need. If Ghost Tunes is to succeed as a download service outside of Brooks’ name, the bundle feature will be the way it’s done. Definitely something to watch over the coming months.