Balkanization would kill major-label subscription services
Sony BMG and Warner are reported to be considering subscription-based music services, but without cooperation these services are dead on arrival.
Sony BMG and Warner are both reported to be considering subscription-based music services.
Earlier this week, the AP quoted Sony BMG CEO Rolf Schmidt-Holtz discussing a subscription-based service that would offer unlimited downloads of all songs in the Sony BMG catalog for 6 to 8 euro. The downloads would be transferrable to all portable devices, including Apple's iPod. DRM would presumably play a part, so that content would be disabled on a device if you stopped paying the subscription.
Warner is taking a different approach, proposing that consumers be charged a monthly fee by their ISP--maybe five bucks--for the right to download as much music as they want from a massive industry-run database. As Conde Nast Portfolio reported yesterday, Warner has given former Geffen Digital head Jim Griffin a three-year contract to develop this strategy. Not mentioned in the article: since Time Warner owns the number-three and number-five U.S. ISPs, AOL and Road Runner, the company has a built-in audience of more than 17 million users to jumpstart any such service.
It's nice to see the major labels thinking about "celestial jukebox" models of distribution more than 8 years after they were first proposed, but as usual, the labels still don't seem to be able to acknowledge their competition--unlimited free downloads from file-trading networks and random Web sites.
If the Sony BMG service contains only music from Sony BMG, as is suggested in the AP report, it's dead on arrival. Nobody is going to pay a dime for a catalog containing 1/4th of the major labels' output and nothing from independent artists.
I personally think Warner's hit upon the only reasonable compromise between copyright-owners and end-users: bundle a very low monthly fee into some other product and allow--or better yet, encourage--anybody who buys that product to download all the music they want. A mandatory fee would inspire an outcry, but ISPs could solve that by making the "unlimited music" option part of their higher-priced packages--bundle it with more bandwidth, for example. But this can't be a balkanized plan with only Warner content, or it'll fail just as badly as the Sony BMG service.
If the labels each want to build their own celestial jukeboxes, at least they could have a partnership that lets membership in one service transfer to the other services--like ATM cards today.