Opinion and analysis of the day's music news.
What's The Potential For Access Models?
-- So what's the potential for access models? Jon Healey's recap of a contentious discussion at the Digital Music Forum West conference underscores the uncertainty surrounding music subscription services. The panel was "a clash between faith and empirical evidence," he writes, "and the former had more troops."
On the empirical evidence side is Music Choice CEO David Del Beccaro. He said people may be willing to buy media subscriptions like cable TV but won't pay a monthly fee for music. Clearly the numbers are his side. Paid music subscriptions are still a niche business and are even more niche than three or four years ago. It goes beyond just music, he said. "This isn't the only digital media business where subscription isn't working."
Subscription supporters argued that product improvements and changes in technology will help subscription models where they have previously failed. And they're right. Today's subscription service is light years ahead of its predecessors. DRM still exists, but with smartphone apps people can use the service of choice with the device of choice. (Well, almost. iPhone and Android users get their pick of services. Blackberry, Palm and other operating systems don't have as many options.)
Apps are becoming available on connected TVs, too. Google TV will come stocked with Pandora and Napster, among other services, and Vevo has created an enhanced version of its website especially for the new service. The Roku set-top box currently offers apps for Pandora (free) and MP3Tunes (a small monthly fee to stream your own music collection from an online locker).
"We're one mile into the marathon," Ted Mico of Universal Music Group said of the industry's long-term outlook for subscription services. But what if consumers just don't want to pay for these access models? Perhaps subscription services have been affected by more than just technical problems and poor distribution. Maybe the biggest problem is the entire value proposition. Maybe not even a good subscription service is worth $5 a month to more than a very small group of consumers.
Music executives need to be cognizant that their love of music and their listening habits are not shared by Joe and Jane Middle Class American. As a result, a typical consumer has not found value in a music subscription service. To many serious music fans -most executives in the industry - an offer of unlimited access along with sharing and discovery features is easily worth $5 or $10 a month. But year after year consumers have voted against paying for these products.
Rhapsody was once around 1 million subscribers but dropped to 675,000 last year before its iPhone app was released (since then the company says the app has helped drive new customer acquisition). Napster was never that high. In Europe, it has taken incredible media buzz, a great product and over 9.5 million free, ad-supported users to get Spotify to 500,000 paying customers.
Consumers do pay for Pandora, the most popular digital music service, but in such small numbers that advertising, not subscription fees, is Pandora's key to profitability.
Subscription models are looking more and more like the record industry's last attempt to win back mainstream consumers. The CD is on a downward slide. Digital download sales are flattening out. There's growth in ad-supported services, but there's little revenue there to be captured. It makes sense that people will be stubbornly optimistic about subscription services, right? (Los Angeles Times)
PayPal To Launch Micropayments, Could Boost Music Purchases
-- PayPal will launch micropayments in a few weeks. The company first announced a micropayments product in August. Micropayments are expected to be a boon for virtual goods but could prove beneficial to music as well. Currently there is too much disincentive to charge very small amounts for music downloads because of payment processing fees. (TechCrunch)
Tech Writer Rosoff Joins Silicon Alley Insider
-- Matt Rosoff, an analyst at Directions on Microsoft and writer of CNET's Digital Noise blog, will start Monday as Silicon Alley Insider's West Coast editor. "I expect to continue covering the intersection of music and technology there, from start-ups to the big players like Apple, Google, and Microsoft," he writes at his blog. This is great news for his readers. Rosoff blogged at Digital Noise every day or two (and has contributed to Billboard.biz). Now we'll get his thoughts many times a day. (Digital Noise)
SoundCloud + Tunecore
-- Distributing your music just got a bit easier (and it was pretty easy
before). SoundCloud now allows users to log into TuneCore, connect the
two accounts and select which tracks from their SoundCloud libraries to
distribution to digital service providers such as iTunes, Spotify, eMusic, Thumbplay and Amazon.com's MP3 store. Pricing is the same ($9.99
for one song and $49.99 for an album to all top-rated stores).
SoundCloud is a cloud-based service that allows artists to receive, send and share their music. The SoundCloud embeddable streaming widget is a common site on artist websites and blogs these days. It's simple, graceful and effective. One fun feature is the ability of listeners to leave comments at specifics points in a song (depicted visually as tags placed at specific points in the song's wave file). The SoundCloud DropBox is increasingly common, too. It allows visitors to a web page or social network page to easily send a file using SoundCloud. Back in June, Billboard named SoundCloud one of five hot digital startups to watch. At the time, the service had over 1.2 million users. It landed $3 million in funding back in late 2009. (TuneCore)
Myxer To Hit 40 Million Users
-- Myxer, a mobile service that offers free and paid song downloads, games, images and apps, says it is on pace to reach 40 million users by the end of October. It estimates its share of the U.S. mobile market at 15% and says it's serving about 90 million downloads a month. In the last 12 months, it has over 1 billion downloads. (Press release)
Opinion and analysis of the day's music news.