Brian Boydon music
'IF YOU can't monetise the music, then monetise the experience." This rather unwieldy phrase has been doing the rounds of music providers for the past few years. All it really means is that peer- to-peer downloading is still destroying the music revenue stream - which, worldwide, is down from $15 billion annually 10 years ago to slightly below $10 billion now.
By "monetising the experience," the industry is saying that, sooner than you think, music will stop being a product and become a service.
As a product, you choose what albums or downloads to buy on a piecemeal basis. However, as a service, any amount of music is available once you have paid a blanket licence fee. Decoded, this means that a monthly subscription charge (possibly bundled into your internet service fee) will open up the entire iTunes store (or a rival's equivalent). It's the future, and already been decided on your behalf, so best get used to it now.
The peer-to-peer file sharing networks, which enable people to illegally download, are never going to go away, but the official music industry hopes that this new subscription service will be attractive enough to restore some equilibrium to a battered industry.
There are already subscription services out there. Nokia and the record label Universal provide a service that allows unlimited of downloads to your phone (though it covers Universal artists only) for a regular monthly fee.
SonyBMG will soon unveil its new music service, which again will allow unlimited access to its vast music catalogue for a fixed monthly price.
In the past month there have been rumours of hush-hush talks between Apple and the major record labels about the new subscription model. Within months Apple could dip its toe into the subscription waters by offering two differently priced iPods/ iPhones. If you buy the regularly priced device, you still pay for your individual iTunes downloads; if you buy the more expensive model, you get free access to iTunes.
The subscription argument has essentially been won and the only haggling now is over prices. It's likely that the iPod/ iPhone that allows free access to iTunes will be priced $100 higher than the traditional model, but it's still unclear hoiw long this will cover free access. It may be for 12 months or may be longer. And Initial indications are that a monthly subscription fee will be between $5 and $7.
The music industry hopes to raise several billion dollars a year globally from subscription fees. That money will be divided up between the seller (Apple or similar) and the record companies, which will, in turn, pass some of it down to the artists who created the music. Obviously, the subscription service model won't cover the sale of actual CDs.
What "music as a service" will do to the nature of the business remains to be seen. If music is "free" - in that it has already been paid for and you can download as much as you want - then will people broaden out their tastes or simply congregate around heavily promoted chart acts?
Music has been devalued over the past few years. Does the subscription model mean the ultimate devaluation, or will it turbo-charge a brighter and bolder industry?
Either way, you're the last person the players will be asking. Smile - you've just been monetised.
