What's the future of music distribution? The answer seems to be a resounding, "Who the heck knows?" But there is certainly a growing number of business models on the table, giving consumers unprecedented choice.
One of those options is the new Napster, which WebProNews' Bruce Houghton reviewed last week:
Also last week, Saul Hansell at the New York Times' Bits Blog talked to Tom DeVesto, CEO of luxury radio maker Tivoli Audio. DeVesto said that there's a substantial market for music consumers who don't want to fiddle around with gadgets or playlists:
Which leads to a third music distribution model: satellite radio. Although XM/Sirius may have had a bit of a head start on some of the newer online options, the company will soon be facing a challenge: higher subscription rates, as royalty rates agreed upon in 2007 are set to rise in August. This could spell big trouble for the company, especially given the proliferation of online options. Technologizer explains:
UPDATE: Carl Longino at Techdirt also weighs in on the Internet radio aspect and ties in the troubles facing satellite radio.
One of those options is the new Napster, which WebProNews' Bruce Houghton reviewed last week:
I've spent some time on the new Napster service over the last few days, and aside from a less than intuitive interface, I can't find much to dislike. At just $5 a month for unlimited streaming of a deep catalog along with 5 mp3's monthly, the service is effectively free. And if I'm in Napster previewing a track or album (and since they've already got my credit card), why not just buy it there instead of jumping over to Amazon or iTunes? Reports are that Napster got a special deal on streaming licenses from the labels in part because they tied listening so closely to purchase.Houghton thinks "there's an audience for the new $5 model, particularly for those comfortable with the Napster and parent Best Buy brands." But it isn't the only game in town.
Also last week, Saul Hansell at the New York Times' Bits Blog talked to Tom DeVesto, CEO of luxury radio maker Tivoli Audio. DeVesto said that there's a substantial market for music consumers who don't want to fiddle around with gadgets or playlists:
Mr. DeVesto is building his products mainly around traditional radio stations that have online streams. I asked about custom radio services like Pandora. He said that Tivoli has talked to Pandora, but said they hadn't been able to work out an economic deal. The displays on Tivoli devices can't display advertising. And users, he argued, won't want to hear audio ads, nor will they pay a fee. "Pandora with commercials is not Pandora," he said.Hansell says otherwise, that users might not mind the ads; but he also says, "This is the right debate. Most people are in fact looking for the easiest way to make music they like appear, just like they were switching on a radio."
Which leads to a third music distribution model: satellite radio. Although XM/Sirius may have had a bit of a head start on some of the newer online options, the company will soon be facing a challenge: higher subscription rates, as royalty rates agreed upon in 2007 are set to rise in August. This could spell big trouble for the company, especially given the proliferation of online options. Technologizer explains:
Worse yet, this fee will increase by .5% per year through 2012. Thus it will be at least $2.10 in 2010, $2.21 in 2011, and and $2.32 in 2012. So much for those rate freezes eh? This is really bad for Sirius XM. The Internets are flooded with consumer complaints about the service post-merger, and many are looking for a reason to drop sat radio like a rock. I don't see how the company doesn't lose more customers over this. The company better get more responsive to programming complaints or there may be big trouble in sat radio-land.Who knows which of these models or companies--among the scores of other options out there--will prevail. But one thing is for sure: consumers are in the drivers seat in the digital music market, and they aren't being shy about voicing their opinions.
UPDATE: Carl Longino at Techdirt also weighs in on the Internet radio aspect and ties in the troubles facing satellite radio.
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