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All You Can Eat Music?

March 20, 2010

“Every song ever recorded available on demand at any time.”

That’s the potential and promise of all you can eat music subscription services like Spotify, MOG, Rhapsody, and Rdio.  This value proposition is enough to give music nerds (myself included) heart palpitations.  The monthly subscription fee varies between each company’s business model but anyway you cut it, it’s a great deal.  If you’re spending $30 a month on vinyl, iTunes downloads, and countless hours trolling torrent sites for free music, $10 month for every song ever made is an amazingly great deal.  Don’t think these business models will catch on?  You’re wrong.  Sorry.  Don’t tell me that people will want to hold album art and will always want to go to a store and browse the new releases.  If you think that then you haven’t yet experienced Spotify or used the Sonos system.  It’s not a matter of if but when.

Ubiquity of these companies can’t come soon enough if you’re a music nerd but what if you’re not?  Also, let’s face it; the music obsessed and digitally savvy early adopters comprise a shockingly small number of actual consumers.  The vast majority of music consumers (consumption=listening not buying) don’t buy digital mp3s, don’t download music on torrent sites, still listen to radio, and still buy CDs at Wal-Mart or Best Buy (if they buy music at all).  Have they heard of Spotify?  Definitely not.  Are they anxious awaiting it’s arrival in the US?  They could care less.

All digital music subscription services have a gargantuan task in licensing music catalogs and building a comprehensive library.  However, and unfortunately for these companies, this is not their main strategic problem.  The main strategic problem will be convincing the general public to pay for music like they already pay for cable TV and internet access.  That’s quite a challenge.  Telling them that you will have “every song ever recorded available on demand at any time” won’t cut it.  Casually music listeners don’t want or need that much choice.  It’s cumbersome and overwhelming.  Furthermore, paying for unlimited music access may seem wasteful and unnecessary for casual music listeners.  If you are only listening to a few tracks a week or just need background noise, 10 million tracks is not a value add.

So how do the all you can eat music services solve this problem and become successful?  I think the answer is seamless hardware interface and interoperability.  In a nutshell, it will be ease of use.  iPods are sleek and easy to use, but it’s still a pain to load them with music.  The new music services need to pick up where the iPod left off and increase ease of use even more.  This is both a hardware and software challenge.  Customers need to be able to register and pay with a few clicks and a few minutes and then be able to access the service across different devices seamlessly.  They then need to be able to access and enjoy the service on their home stereo (TV), their car stereo, their handheld device, and through any internet connection.  The user interface will need to be intuitive and consistent across all of these platforms.

All these things might sound like a pipe dream wish list for an idealistic music nerd.  Well, I guess they are.  However, music subscription services will need to fulfill all of these needs by partnering with ISPs, hardware manufacturers, and Telecoms if they want to solve their main strategic problem.  Once again, that problem is convincing the masses that they need to pay $10/month for access to music.  It’s building a new recorded music business on the back of subscription services that will make everyone (artists, listeners, and copyright holders) happy.  Forget the early adopters, they will sign up well before these problems are addressed.  However, you can’t build a multi-billion dollar company on the back of early adopters alone.

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