Originally posted 7/21/2011
This week I was lucky enough to score an invitation for Spotify, the music service that has been widely available in Europe but just recently opened its invitation only doors to US customers. After seeing what was available with the free plan I looked at the pricing options to get full use of the service. This led me to think about how everything is now shifting to a subscription model or as others like to say “to the cloud.”
If we go back and look at music and the distribution model, it essentially was make music, put it on a CD, customer buys the CD once and the sale is complete. If you only liked one song on the cd, you either bought the whole album or maybe you could find just the single with a few B sides on a separate disc (again another purchase).
The problems with this from the company side is only one sale is made and that person has that music forever. If their computer dies, they can always re-rip the music and their good to go. Now things are shifting to digital distribution model. People buy CDs or even individual tracks and they can either download them to their computer or to a digital storage locker like Amazon Cloud Storage or Apple’s iCloud.
With the introduction of Spotify, and other services like Last.FM, Pandora and Rdio, people don’t buy the music anymore. They essential rent it on a monthly subscription to stream wherever they are via a software application or the web. There are positives and negatives to this new system.
While it won’t totally get rid of piracy, it will curb it significantly. In the old model, digital tracks that are downloaded can have identifying information embedded (where it was purchased, by whom) so if the file is shared, you can see who shared it and where it came from.
The new model is great for the music companies. No more downloads. All the music stays on the web, people are only streaming it, essentially paying to listen to it.
Consumers no longer have to buy CDs or digital albums or songs. They can pay a monthly subscription and have access to a huge library of music as opposed to buying all the music and amassing their own library.
Access everywhere for a low monthly fee (marketing speak). No more worries about how I am going to share my music on all my devices (desktop, laptop, ipod, and mobile phone).
Unfortunately, the downside is people have less control of their music and essentially don’t own it anymore. They’re just renting it. Although for now, there are still companies that let you download the MP3s after you move them into the storage locker but it wouldn’t surprise me to see that eventually end.
More for the record companies. Instead of a person making a one-time CD purchase, they’re now paying every month to potentially listen to that same CD over and over.
There will still be the purists who want to maintain their own collection but all media will be digitally available with hard copies nearly impossible to find. Not only is this affecting music but software as well. Case in point: Apple’s new operating system OSX Lion. It’s only available through the Mac App Store (digital download) and while they will distribute copies, it will only be on USB drives. Now Apple maintains who owns copies and severely limits how easily copies made available can be mass produced (piracy).
Where is this headed? Everywhere (eventually). Even Electronic Arts is looking at moving to a similar model with their yearly sports games. Why buy a new game each year with only minimal new features that allow you to play it on only one system? Why not switch to a subscription based model that will allow you to play it on all systems and charge even more for the product?
By moving digital data into the cloud, it makes it easier for companies who provide the content maintain control over it by playing up on convenience for the consumer. Not sure how I feel on it yet but the times are changing.