Keep a close eye on this MusicStation subscription mobile music service that launched this week in Sweden. What a concept... for an extra $4 a month to your phone bill, you can download an unlimited amount of music to the mobile phones. Stop paying and the music goes away.
It's the classic music subscription model that has proven such a difficult sell online, but if done properly on the mobile phone can make a huge impact. The key to the MusicStation approach is that the company made deals with a wide variety of phone manufacturers to include the software necessary for the service in advance. Now all it needs to do is convince the mobile operators to turn it on.
The only major wireless operator in the States to take this route is AT&T Wireless, which is selling phones compatible with subscription services like Napster and Yahoo Music. However they still can't download the tracks over-the-air yet, primarily due to the fact that its network hasn't been fully converted over to 3G speeds yet.
But when the network is ready, this could be a monster. Already AT&T is offering a year's worth of Napster FREE to customers who sign up for both AT&T's Internet and wireless services. Free music for a year! I'm very much looking forward to learning the results of that promotion.
Compare that with the iPhone. As a mobile device -- yeah, it's killer. But as a music phone? All it does is let me transfer music purchased on iTunes to my phone, like any other iPod. Big deal.
Wireless operators need to lose their current a la carte pricing strategies and embrace a subscription model. I'd easily pay an extra $10 a month to download all the music I wanted, particularly if bundled with a music ID service and new music recommendations based on my activity. That's a 360-degree music SERVICE that provides VALUE one a regular basis.
What's the problem? Well, we can use some better music-capable devices, but those will come. If MusicStation takes off, it might be the case study needed to prove the model and get other operators in line. Then, we'll see the promise of mobile music truly delivered.
I wrote a company profile on BurnLounge just before they launched almost two years ago. It seemed like an interesting idea -- let fans create their own digital music stores based on the music they liked best and get them involved in growing the digital music market. The introductory prices seemed fair and the tools given in return fairly robust.
I did raise my eyebrows a bit, however, at the part where higher-paying members would get bounties for each affiliate store they signed up. But I gave it the benefit of the doubt.
The FTC didn't, and is seeking to shut the company down for being a pyramid scheme. Turns out BurnLounge has been promising customers hundreds of thousands of dollars in profits for signing up, which of course hardly anybody makes except those at the tip of the pyramid.
The problem with BurnLounge is that they had a good idea, but took the wrong approach.
When not even iTunes makes much money off of selling a la carte digital tracks, how can Jimmy down the street expect to rake in thousands of dollars doing the same? Well, they can't -- particularly when BurnLounge-purchased files aren't compatible with the iPod. In turn, neither can BurnLounge unless they find some other way to making money.
That other way turned out to be what amounts to a pyramid scheme. But that's not to say the concept of engaging fans to promote and sell music isn't a good idea. "Peer recommendation" models like PassAlong embrace this concept better. With PassAlong, users get points each time a song they recommend (or pass-along) to friends is ultimately purchased.
The reason these work better is that recommendation is more a push model-the person doing the recommending pushes his/her recommendations to friends. BurnLounge is a pull model-friends have to visit the tastemaker's site to see what's for sale. Sure BurnLounge has tacked on some social networking components to the service, but the model is still fundamentally flawed.
Anybody getting into the digital music game expecting to make a fortune off of a la carte sales commissions is out of their freaking mind, and anybody trying to convince them otherwise is either just as crazy or flat out lying. How about some other ways of rewarding effective tastemakers -- such as a bounty for each friend they sign up to a subscription music service, or giving high-traffic generators a share of advertising revenue?
None of these alternatives are lucrative enough to make anyone quit their day job (unless they're reporters perhaps), but they might be incentive enough to convince the digital faithful to convert more consumers to the flock.