Columbia wanted to have a subscription service for $20/mo that would allow you access to all music on all your devices (computer, cell phone, car, portable player) as long as you kept paying the monthly fee. One must assume that this would allow you to categorize the music into genres, likes/dislikes or other ratings, playlists, etc. I think the service would be nice. Instead of burning a cd or creating a playlist and copying it to your ipod and then hooking your ipod up to your car you can just do it online and then it will be on all devices.
The two big questions are, of course, will a vast majority of consumers agree that this is a good deal, and will the label companies agree that this is what they want to do. One source says that the US spends $24 a year per capita on music. Is this deal that much better than what we have now that America would spend ten times what they are spending now on music? I think that figure does not take into account a large majority of people, like myself, who listen to a lot of music but spend close to nothing on music. In my case, I might go for the deal because, like many other people, I put up with a lot of annoyances and go through a hassle to ensure that I spend no money on music (put up with listening to the radio, download music, go through hoops to get free albums, etc).
For the record companies, this deal may be very sour. For starters, it nullifies any deals they are currently getting from Sirius/XM. Why pay a monthly fee to get more radio when you can pay a little more to listen only to what you want and without commercials? These customers already show that they are willing to pay for music, and I would think most would make the jump to the new service. Also, when removing all those people that don’t spend any money on music, and assuming that most of them would still not pay anything for music and won’t go for this deal, would this service actually take in less money? Of those who spend money on music, do they spend more than $20/mo? If so, then the deal is bad for the record labels. In addition, how much profit do the companies make from this $20/mo versus how much do they take in from cd sales and online downloads? The per capita spending may go up, and smaller labels may see a gain (if they get a good cut on the profits), but bigger labels may see a drop in profits from this scheme. However, that argument seems dubious since Columbia records is promoting the idea.
Aside from pure profit considerations, there is also the issue of control. Labels want to control what you listen to through distribution and radio. They want to promote certain artists, who may not be as good as other artists, but for some reason will bring in more money if they become popular. For instance, Gwen Stefani will bring in more money through concerts and other merchandise than Kimya Dawson will (even though she did the soundtrack for Juno, she wouldn’t be a big concert artist or merchandise junkie). Therefore, assuming the label companies get something from peripheral products, they will want to promote the cash cow and not the talented indie artist.
More importantly, however, is the issue of privacy (which is the stimulant behind this scheme). Will this system erode piracy? If you can have access to all music for a relatively low price, would you spend hours a day downloading music illegally? Will this system increase piracy? How long before someone cracks the security and figures out how to make illegal copies of the unlimited supply of music provided by this system and then sends them out to the world? Finally, is piracy a bad thing for the music industry? This question is long in debate and needs its own post, but there are good arguments on both sides. Without fail, piracy will hurt some artists/companies and will benefit others. Jack Johnson’s first album was released free and other artists have said that the leaking of their music was how they got famous and it gave them a chance to make money on subsequent albums. Of course, Metallica and others disagree, stating that the people who would normally buy their album are now getting it for free and thus creating an obvious loss in sales and profit.
What do you think of this Jukebox in the sky idea?
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