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Wednesday, October 21, 2009

Music Subscription Still Coming On Strong

As posted a few times here previously, online music subscription is coming on strong, although sometimes the indications are subtle.

It's been reported that the online radio station Pandora now has over 35 million listeners and getting 65,000 new subscribers a day. Pandora isn't exactly a radio station in that you select the tunes you want to listen too and the service then supplies you with music based on your selections that it thinks you'll like, but it's close enough to a subscription model that 35 million listeners will have no trouble switching over whenever either Spotify becomes available in the US (it's being held up by one of the major labels), or iTunes flips the switch on it's service.

Then comes the news that over 500,000 iPhone users have downloaded subscription service Rhapsody's phone app, and you begin to believe that music subscription really is right around the corner.

With subscription, everyone wins, almost. For a flat fee (some say that $9.99 per month is the sweet spot), a subscriber gets all the music he wants to hear, any time and any place. That's a whole lot better than having to buy something new that just hits the charts for $1.29 per song, or having 20 gig worth of music cluttering up your drive.

The record labels win because they're getting the majority of ten bucks a month per subscriber every month. No marketing, no inventory, but lots of profits just like the gravy days before MP3s.

But of course, the artist is left out in the cold, since most label deals don't cover subscription at the moment, or the deals are so weak that it means virtually nothing to them in terms of income. And an artist can't even rely on publishing from subscription, since there's not a mechanism currently in place to digitally sort through all the streams in an efficient manner, not to mention the fact that we're only talking a fraction of a cent per stream anyway. This, of course, will be rectified eventually, but not without a long hard battle and a lot of money in the label's coffers first.

But rest assured, if you've not already indulged, music subscription will be coming to a computer or phone near you - sooner or later.

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