2 good to be true? 2 million tracks for $10 (or £10)!

I love Napster. I never purchase CD’s or buy individual downloads. I don’t enjoy using P2P networks and I don’t own a stereo or CD player.  All of my music consumption is non-physical and I am not caught up in the iPod hype. All mp3 players sound the same to my ears.

2 million tracks for $120 a year! You pay more than that for cable or satellite TV in a year, and with far fewer hours of quality entertainment.

Music subscription services like Napster are hammered by both the media and our own music industry, but when you look at the numbers you can see a trend taking place.

The first half 2006 of IFPI statistics for digital sales by format give some evidence consumers may be waking up to this model that seems almost too good to be true.
 

Master ringtone	32%
Online single track	32%
Online album	15%
Subscriptions	7%
Mobile single track	6%
Mobile other	5%
Online other	2%

I have to admit that I was a bit surprised when I compared the percentage of subscriber sales to single track and album totals. I think 7% sales is a healthy number and in 3 years I wouldn’t be surprised to see subscription services account for more than 20% of digital sales. And in 7 years I think purchasing individual tracks will be the smallest percentage of digital sales revenue.
 
It takes time for the message to reach the masses.  Remember the steps.  First buy CD’s online -- Music Blvd., CDNow, Amazon, etc., then buy tracks and albums online one at a time and finally receive all of the music for one monthly price.  There is nothing wrong with the ala carte downloading model.  It is just not the future.  It is an interim step.
 
I can think back to 1997 when I first heard Jim Griffin publicly speak about “access vs. ownership” which was something I believed in as well.  It was great to hear someone articulate the argument so well.  Unfortunately, I hear people describing subscription as the “rental” model.  Anyone that calls subscription a rental model just doesn’t understand the paradigm shift that Jim was proposing.
 
Renting music and accessing unlimited amounts of music are two different things.  It is like comparing renting DVD's to subscribing to cable/satellite tv.  They both involve paying without owning but the user experience is completely different.
 
Selling music on CD and vinyl is (and always has been) a small cottage business when compared to other industries especially considering the fact that music is ubiquitous.  Selling music digitally track by track, album by album is an even worse industry.   There just won’t ever be enough money in it.  Never.  Ever.
 
We all know that the subscription services aren’t perfect now.  There are the annoying interoperability problems, lack of content (although 2 million plus tracks isn’t bad) and the flaws of Plays For Sure.  So what.  This is all being sorted.
 
I can’t understand how anyone doesn’t see this as a better value proposition than purchasing CD’s or buying individual tracks.  My guess is that people that don’t love subscription services are people that haven't subscribed.  If they did they would understand.

Posted at 05:13PM Jan 11, 2007 by Scott Cohen in Music  |  Comments[2]