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What's the money sweet spot for music fans?

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Thursday, Jun 4, 2009

That’s the magic question ain’t it?  Apple thought it had the answer with its 99 cent strategy but then had to bend to the major labels’ will and offer variable pricing.  The results?  Digital Music News and several other sources say that the higher prices for newer tracks have led to weakening sales. 


Unlimited music downloads for a set monthly fee sounded promising too as a Billboard article noting a study that a majority of users would shell out for a ‘legal P2P’ plan.  Nokia’s Comes With Music plan offered just that but started off disappointing start because they made the mistake of attaching DRM to the tunes, leading users to ask (as they note in the article) “why can’t I put this on on my iPod?”  Not an encouraging sign. 


eMusic seemed to be doing OK in its indie niche until recently when they took on the Sony catalog and then promptly offered less for more, telling customers that they’d have to pay a bigger monthly fee and get less music in return with the only payback being that they get a crack at Sony’s catalog.  The reaction was shift and fierce- users were boiling mad over the news, posting angry messages at the eMusic announcement page explaining the new pricing plan.


Just like the newspaper biz, the music biz is trying to find the right price that can beat out free (which sounds kinda crazy when you think of it).  One of the most promising ideas MIGHT be tying the payment incrementally to another service (i.e. phone, cable, Net access) as suggested in Wall Street Journal article.  The early cable TV model of offering more and better service is the model here and so far it’s a question mark and a theory at best but the idea of offering more goodies and extras are models already being tested by the industry- multi-format releases with additional material- so it might not be that far-fetched.  Nowadays, just about any feasible gamble is worth taking in the music biz…



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