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Monday, July 27, 2009

Digital Music Is About To Change

You can feel it in the air (or on the screen might be a better phrase). Digital Music is about to change, hopefully for the better. For years the major labels and every industry pundit has been predicting that music delivery by subscription will be the future instead of music downloading, and it looks like they might be right.

Why collect Gigs of downloads when you can listen to virtually any song you'd like to at any time, anywhere? That's the premise of subscription music, which until recently, didn't seem to have much steam behind it. Sure Rhapsody and Napster had a tad less than 2 million subscribers, but you really couldn't call that critical mass.

But in the last year, the free service Pandora has picked up steam and gave even the most casual listeners a taste of what subscription could be like. Now the buzz is that Europe's highly touted Spotify service is about to enter the States as they solve their licensing problems with the major labels, which the pundits see as a game changer.

But the 800 pound gorilla is lurking in the jungle. Rumor is that Apple will trot out a subscription service based around iTunes soon, which will open up the floodgates and change the industry forever. As industry consultant Ted Cohen said in an interview for my upcoming book, Music 3.0, "If iTunes announced subscription tomorrow, we’d be over the hump."

Yet questions remain. It seems like consumers now understand that they only get 10 songs per month for $10 from a download service as compared to 10 million songs on a subscription service. The bigger issues will become if and how the artists get paid fairly from that $10 and if publishers can build a mechanism to take advantage of the digital accounting so the songwriters can get paid as well (it's now done manually and costs too much to administrate).

The next 12 months should be very interesting indeed in the digital music world.

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