As the rights owners continue to hurl punches at online piracy, which refuses to go down without putting up a fight, the music industry has finally started to evolve and think of new ways to obtain revenue from music in the digital world. Enter the world of subscription services.
The best known of these, Spotify, has been around for some time. Many alternatives have sprung up, although without the same notoriety. Spotify, along with competitor Deezer, has a free service. In Spotify’s case, this was a major factor in popularising the platform. However, Spotify has since scaled back its free service and added significant limits on their free service.
These are being used to entice users to sign up to the unlimited and mobile-compatible fee-funded versions. The success of the ad-funded business model which has worked so well for YouTube, has not had the same effect. Although there are ad-funded internet radio stations doing very well, such as Pandora, these do not allow the same level of control as subscription services. Few are available outside of North America.
So Are Subscription Services the Future?
With the Official Charts Company releasing a new streaming chart last month, the format is clearly achieving something. Providing music on the go is also an area in which these services are doing well. The ability to access millions of tracks on your smartphone is possible since the development of apps.
Mobile music is being facilitated by music locker apps, which have been developed by Apple, Amazon and Google. These services allow users to store their music collection in the cloud and access it using wi-fi devices or mobile internet. While only offering music you own or have downloaded, these services have much cheaper subscriptions. In the case of Google Music, they have managed to make it free.
These services are adding to the new picture of the music industry that is developing to counter file-sharers. It is an attempt to offer a sustainable solution that will benefit both rights-holders and users.
Are there Subscription Alternatives?
One of this week’s interesting news stories is the launch of Domino Records’ new subscription membership service Domino Drip. The service offers “two of our most exciting albums, plus bonus material” in return for a monthly fee.
This concept aims to bring fans closer to those who make the music, not just the music itself. It is essentially the label’s answer to the traditional fan club. Domino are not the first to jump on this idea and have set up the service through US-based company drip.fm. They join other indie labels such as Stones Throw, Fools Gold and Ghostly International (who set up the platform).
Although the biggest of the independent labels using the platform, Domino adheres to a far narrower range of genres and styles than the majors and is obviously responding to a fan-base of the label itself rather than just its artists.
The question is, will this trigger other similar independents that have a distinct style, such as Rough Trade or the American Sub Pop (although now partly owned by Warner).
These premium memberships could become a major player in fan-interaction and revenue generation in the future as listeners become closer and closer to the artists that they love. With them, ‘true fans’ will not just be a faceless follower among the millions of others on Twitter, but have access to rare downloads and merchandise as well as staying one step ahead of the rest with new releases.
These innovations appear to be signs that music business is finally reacting to what has been described as ‘the lost decade’ and is realising that the digital age requires new approach.