Another proponent of music subscriptions
Critics of the subscription-based model for digital music claim it can't work because listeners want to own their songs, not rent them. But the founder of Naxos Records begs to differ.
Last week, New Yorker classical music critic Alex Ross wrote about how the Internet is reviving classical music. Among other things, he points to an explosion of blogs and message boards that allow artists to communicate directly with fans and help younger listeners educate themselves before diving into this intimidating realm.
One of the most interesting parts of the piece, though, was his conversation with Naxos Records founder Klaus Heymann. After years of plugging along as an "expensive hobby," Naxos has begun to earn significant revenues selling CDs over the Web--the company earned more than $80 million in 2006. It also operates a download service called Classicsonline. (There's something heretical about being able to download and pay for each part of a classical work separately, but for me, Beethoven's 9th peaks in the 2nd movement anyway. Now I can buy only that movement for $2.39.)
But Heymann believes the future resides in subscriptions. The company put most of its recordings online way back in 1996, and today, the Naxos Music Library allows listeners to stream any of Naxos's more than 200,000 recordings for a subscription fee of $19.95 a month. Eleven thousand users have signed up--not bad for a genre of music that is usually written off as a commercial dead end.
Classical music listeners might be more amenable to subscriptions than other types of music fans. Most listeners aren't familiar with classical music, and they're not going to find out much from TV or the radio, so a subscription helps with discovery. Pop music is about fashion and lifestyle as much as the music itself, so there may be more of a draw to own physical discs. (Admit it--you've judged people by their CD collections.) Even so, the fact that Naxos gets 25% of its revenue from digital sales means lower distribution costs and higher profits--a point the mainstream music industry might want to observe.