Are We Listening To The Music Industry?

We are often asked to look at other media segments and learn from their experience and one that is often quoted is music. We are also often asked to fear ‘free’ and a change to the business models of today. Some would say the mistake the music industry made was waiting too long to provide a business model to support pay for digital and everyone got accustomed to the idea of free. Other would say that it was their inability to understand demand and react. Napster, Kazaa and others merely did what everyone was doing anyway but did it better.

So it is very interesting to watch music today as it grapples with the new Spotify model which is now one year old. Not only are they going to new places with their free model but they are also treading an interesting path with their premium £10 a month model. A premium user can now store more than 3,000 tracks offline, to listen to as and when you want and these are accessible on the move via an iPhone, iPod Touch or Android phone. The equivalent cost of ownership would amount to some £2,3005 or 20 years subscription on Spotify! An added bonus is that you can switch off spotify payments and when you switch them back again you still enjoy the same level of access.

Now Napster is to offer unlimited streaming for £5 per month plus five DRM-free downloads without charge with extra downloads charged at a modest 59p.

Forgetting the current skirmishes between napster and Spotify what is fundamentally changing is the way we collect and consume music. Why buy when you can rent and pay by the frink, or for many on Spotify, pay nothing to use. Spotify's use of "freemium" where you can use the ad-supported version forever and move to premium on demand makes sense for all. The question now is does this model work in other sectors such as books? Well we do have the public library challenge that is still outstanding and offering a similar opportunity. It is easy to see the appeal of a Spotify for books model – after all its all media. So while the industry continues to demonstrate that it can’t make it mind up on ebook pricing, as always, others have the potential do it for us.