Digital music spins new sales approach

Despite the millions of dollars that record labels spend on advertising, it may be folks like Robert Burke who determine the future of music marketing.

Burke, a South Carolina software tester, operates a popular series of Web sites called Scopecreep.com, where he's posted thousands of digital music playlists, from "Best songs of 1989" to "Palindrome songs," that can be played by any Yahoo or RealNetworks Rhapsody music service subscriber.

On one level, this is little different than the age-old practice of making mixed music cassette tapes for a friend. But as online music retailers look for ways to guide listeners through catalogs of millions of songs, this latter-day mix-making is drawing renewed attention, particularly from subscription services that see people like Burke as key allies in their fight against Apple Computer's popular iTunes.

Last week, Yahoo announced it had hired the creator of Webjay, a site for posting playlists. Yahoo is getting in on what could be a major part of the online music business: A recent joint study from Harvard University and the Gartner Group predicted that by 2010, 25 percent of online music sales will be sparked by consumers recommending songs to one another.

"We fit in between traditional media and word of mouth media," Burke said, explaining the appeal of sites like his. "We're that in-between world that's the best of both worlds."

To date, the playlist-swapping boomlet represented by Burke, the newly Yahoo-owned Webjay and others has been more of a grassroots phenomenon than an effective weapon in the digital music wars. But ambitious subscription music services see music-sharing tools playing an important role in their futures.

A key feature of subscription services is that they give their users the ability to listen to unlimited amounts of music. As long as two people trading song recommendations have both paid the service's subscription fee, they can legally listen to thousands of songs, or swap dozens of playlists without any additional fee.

"The people who get this are those who are more engaged," said Evan Krasts, director of product management for RealNetworks' Rhapsody service. "If you've got someone who understands what this is about, you're going to get someone who's going to be a good customer."

iTunes itself is also a haven for playlist makers. Indeed, its iMix section, with more than 330,000 playlists contributed by individuals, is one of the biggest repositories of music recommendations online.

But at 99 cents per song, a 10-song iTunes playlist costs $10 to download, which limits the amount of songs that people can actually listen to, subscription service executives say.

Still, that argument hasn't exactly triggered a mass rush to subscription services. Carried on the back of the phenomenal success of the iPod, Apple's iTunes remains far and away the most dominant force in the digital music business. Apple executives have said that consumers want to own their music, rather than "rent" it through subscription services.

[bobby_brady]

Subscriptions will never work...Lots of DRM and too much confusion

When I think of iTunes, I know all music is 99cents, when I think of subscriptions, I never know what the rate is, although I know that most subscriptions expect consumers to shell out over $180 a year. I can never figure out what I can do with the music. Can I burn it on a CD? Can I transfer it to a MP3 player? Too much hassle to rent.

Subscriptions will never work out.

[regulator1956]

Too much hassle ??

Yeah, it may be too much of a hassle right now. The PlayForSure logo helps and I suspect Yahoo and Napster will make it even easier soon.

I'm one that favors the subscription model. For the price of a dozen iTunes song, I can pretty much listen to anything I want during the month. The model works for some people and not for others.

I have no doubt that Apple will have a subscription model in the near future - Jobs said he was against having video, but once he saw the demand he jumped on the bandwagon. Now that music subscriptions are starting to build, Jobs will copy that too.

Jobs is great at taking what others do and making the user experience fantastic. He copied a lot from Xerox for the Mac, put the Mac graphical layer on top of UNIX, saw the audio handheld inventions and then created the iPod, and then brought video to the iPod after others did the early innovations.

[tinyelvis]

Subscriptions will work

Bob Bob,

It's really quite simple. Depending on the service, you will spend $6.99 ro $9.99 a month to stream ANY song you wish to any computer.

For about $15 a month you can also load them to a portable player and take them with you.

I have found the only folks who say they don't like the subscription model are those who haven't tried one.
If you love music and try it you're hooked. It's access to anything you want to hear, whenever you want to hear it.

Also, the download and subscription models are not mutually exclusive. Subscription services are ideal for discovering which albums are really worth purchasing.
That alone makes up the cost of a subscription service worth every penny.

If you come to my house I can play anything you want to hear over my home system with YMU or Rhapsody. No iTunes only stiff neck can do that, unless that is, you've spent $2 million on digital files and have the hard drive space to hold them.

[thenet411]

You are just too old or too stupid

Subs are GOING to happen. If you are too old or too stupid to understand the terms of a subscription, better cancel your cable or satellite TV, magazines, and phone services.

[bobby_brady]

Subscriptions will never work...Lots of DRM and too much confusion

When I think of iTunes, I know all music is 99cents, when I think of subscriptions, I never know what the rate is, although I know that most subscriptions expect consumers to shell out over $180 a year. I can never figure out what I can do with the music. Can I burn it on a CD? Can I transfer it to a MP3 player? Too much hassle to rent.

Subscriptions will never work out.

[regulator1956]

Too much hassle ??

Yeah, it may be too much of a hassle right now. The PlayForSure logo helps and I suspect Yahoo and Napster will make it even easier soon.

I'm one that favors the subscription model. For the price of a dozen iTunes song, I can pretty much listen to anything I want during the month. The model works for some people and not for others.

I have no doubt that Apple will have a subscription model in the near future - Jobs said he was against having video, but once he saw the demand he jumped on the bandwagon. Now that music subscriptions are starting to build, Jobs will copy that too.

Jobs is great at taking what others do and making the user experience fantastic. He copied a lot from Xerox for the Mac, put the Mac graphical layer on top of UNIX, saw the audio handheld inventions and then created the iPod, and then brought video to the iPod after others did the early innovations.

[tinyelvis]

Subscriptions will work

Bob Bob,

It's really quite simple. Depending on the service, you will spend $6.99 ro $9.99 a month to stream ANY song you wish to any computer.

For about $15 a month you can also load them to a portable player and take them with you.

I have found the only folks who say they don't like the subscription model are those who haven't tried one.
If you love music and try it you're hooked. It's access to anything you want to hear, whenever you want to hear it.

Also, the download and subscription models are not mutually exclusive. Subscription services are ideal for discovering which albums are really worth purchasing.
That alone makes up the cost of a subscription service worth every penny.

If you come to my house I can play anything you want to hear over my home system with YMU or Rhapsody. No iTunes only stiff neck can do that, unless that is, you've spent $2 million on digital files and have the hard drive space to hold them.

[thenet411]

You are just too old or too stupid

Subs are GOING to happen. If you are too old or too stupid to understand the terms of a subscription, better cancel your cable or satellite TV, magazines, and phone services.

[GRobLewis]

What about Weed?

The service from weedshare.com would seem to offer the best of all
worlds. No subscription fees: people "own" their music, yet can
listen to complete songs 3 times before deciding to buy. And when
they buy, the recommender gets a commission for helping to
spread the music. In fact, if you want to start your own on-line
music store, just buy some Weed files and post them to your web
page, blog, MySpace, whatever. Also, weedshare has the pricing
flexibility that iTunes doesn't.

[GRobLewis]

What about Weed?

The service from weedshare.com would seem to offer the best of all
worlds. No subscription fees: people "own" their music, yet can
listen to complete songs 3 times before deciding to buy. And when
they buy, the recommender gets a commission for helping to
spread the music. In fact, if you want to start your own on-line
music store, just buy some Weed files and post them to your web
page, blog, MySpace, whatever. Also, weedshare has the pricing
flexibility that iTunes doesn't.

[C.Schroeder]

The long term problem...

with subscription services is that either your musical tastes must be short term (i.e. flavor of the month or year) or you are willing to believe that once a tune enters the "celestial jukebox" it will never leave.

I don't trust the music publishers to keep a tune available in the "celestial jukebox" for my entire lifetime. I expect that some years down the road either these services or the music publishers will start to pull tunes with low listening statistics. The reality is that even though storage is cheap and slowly getting cheaper, there will likely still be a tipping point for the cost of maintaining the "celestial jukebox."

I will continue to buy my music, thank you, and in a format that preserves my right of first sale.

[C.Schroeder]

The long term problem...

with subscription services is that either your musical tastes must be short term (i.e. flavor of the month or year) or you are willing to believe that once a tune enters the "celestial jukebox" it will never leave.

I don't trust the music publishers to keep a tune available in the "celestial jukebox" for my entire lifetime. I expect that some years down the road either these services or the music publishers will start to pull tunes with low listening statistics. The reality is that even though storage is cheap and slowly getting cheaper, there will likely still be a tipping point for the cost of maintaining the "celestial jukebox."

I will continue to buy my music, thank you, and in a format that preserves my right of first sale.

[tinyelvis]

Huh

You do not have to give up your music collection when you join a subscription service. You CAN do both.

I don't for the life of me, understand why the two models are pitted against each other like they are mutually exclusive?

How do you discover the music you want to purchase?

Radio? lame
MTV - lamer
blogs - better, but incomplete

Why not take all the latest releases for a test spin and see if they are worth buying.

We are talking about less than $10 a month here people. Less than one CD a month. If you subscribe to a music magazine, cancel now and get a Yahoo or Rhapsody subscription. You'll thank me.

[tinyelvis]

Huh

You do not have to give up your music collection when you join a subscription service. You CAN do both.

I don't for the life of me, understand why the two models are pitted against each other like they are mutually exclusive?

How do you discover the music you want to purchase?

Radio? lame
MTV - lamer
blogs - better, but incomplete

Why not take all the latest releases for a test spin and see if they are worth buying.

We are talking about less than $10 a month here people. Less than one CD a month. If you subscribe to a music magazine, cancel now and get a Yahoo or Rhapsody subscription. You'll thank me.

[cagerattler]

Subscriptions & Playlists are not consumer oriented

Subscriptions and Playlists are a good idea, but not for the consumer market. Let Apple have the consumer market, okay?

You folks with subscription services and playlists need to target another area. See who Muzak targets, and go there. Do you feel that little spark of opportunity? Right. Now go forth and pump your subscription music into every elevator, every dentist office and shopping mall across America.

Do you get it now? Good. Just send me my 20%.

[cagerattler]

Subscriptions & Playlists are not consumer oriented

Subscriptions and Playlists are a good idea, but not for the consumer market. Let Apple have the consumer market, okay?

You folks with subscription services and playlists need to target another area. See who Muzak targets, and go there. Do you feel that little spark of opportunity? Right. Now go forth and pump your subscription music into every elevator, every dentist office and shopping mall across America.

Do you get it now? Good. Just send me my 20%.

[cagerattler]

Subscriptions & Playlists are not consumer oriented

Subscriptions and Playlists are a good idea, just not for the consumer market. Let Apple have the consumer market, okay?

Those offering subscription services and playlists need to go after another area. See who Muzak targets and go there. Feel that spark of opportunity? Right. Now go forth and fill every elevator, dentist office and shopping mall with your subscription music service.

Now do you get it? Good. Just send me my 20%.

(originally posted earlier, but was removed, hmmm.)

[cagerattler]

Subscriptions & Playlists are not consumer oriented

Subscriptions and Playlists are a good idea, just not for the consumer market. Let Apple have the consumer market, okay?

Those offering subscription services and playlists need to go after another area. See who Muzak targets and go there. Feel that spark of opportunity? Right. Now go forth and fill every elevator, dentist office and shopping mall with your subscription music service.

Now do you get it? Good. Just send me my 20%.

(originally posted earlier, but was removed, hmmm.)

[tinyelvis]

Stiff Neck Apple Zealots

What is it with you stiff neck Apple Zealots and your anti-subscription diatribes?

Subs continue to grow and there is room for everyone. Show me a iTuner and a subscription customer and I'll show you the person more knowledgable about music. And he won't be the one with an iPod.

[cagerattler]

Whatever works

Sure, there's always room for a #2 in the channel. And perhaps the #2 player will be a subscription service.

But hey, we're talking about SOUND BUSINESS MODELS and not music knowledge.

Show me someone who is knowledgeable about music and someone who know's how to build a sound business model for their target market, and I'll show you who knows how to run a successful music download business. And he won't be the one trying to make up excuses or pointing fingers.

[markusfarkus]

broken neck

It has nothing to do with iTunes or being an Apple zealot. I think there are a lot of people, especially those who are used to buying and keeping records, cassettes, and cd's, that would prefer to own their music. They take pride in their collections because it's a part of who they are as a person. And they'd prefer not to keep paying a fee for the rest of their lives to keep it.

Now for others, the subscription plan is perfectly fine because they just want to listen to music. They don't care about collecting it. They don't care about why this artist is more alternative than that artist. They just want to listen.

Just because someone subscribes to a music service it does not mean they are automatically more knowledgeable about music. You make it sound like everyone who uses a download service just grabs the top ten for the week and never explores anything else. A depth of a person's exploration of music depends on the individual and has nothing to do with how they find it. Someone who really wants to find new music will find it.

[tinyelvis]

Stiff Neck Apple Zealots

What is it with you stiff neck Apple Zealots and your anti-subscription diatribes?

Subs continue to grow and there is room for everyone. Show me a iTuner and a subscription customer and I'll show you the person more knowledgable about music. And he won't be the one with an iPod.

[cagerattler]

Whatever works

Sure, there's always room for a #2 in the channel. And perhaps the #2 player will be a subscription service.

But hey, we're talking about SOUND BUSINESS MODELS and not music knowledge.

Show me someone who is knowledgeable about music and someone who know's how to build a sound business model for their target market, and I'll show you who knows how to run a successful music download business. And he won't be the one trying to make up excuses or pointing fingers.

[markusfarkus]

broken neck

It has nothing to do with iTunes or being an Apple zealot. I think there are a lot of people, especially those who are used to buying and keeping records, cassettes, and cd's, that would prefer to own their music. They take pride in their collections because it's a part of who they are as a person. And they'd prefer not to keep paying a fee for the rest of their lives to keep it.

Now for others, the subscription plan is perfectly fine because they just want to listen to music. They don't care about collecting it. They don't care about why this artist is more alternative than that artist. They just want to listen.

Just because someone subscribes to a music service it does not mean they are automatically more knowledgeable about music. You make it sound like everyone who uses a download service just grabs the top ten for the week and never explores anything else. A depth of a person's exploration of music depends on the individual and has nothing to do with how they find it. Someone who really wants to find new music will find it.

[snertagert]

Satellite Radio/ Wifi/ipod combined

I thought I wouldn't go for a subscription till XM Satellite Radio landed in my lap. I always figured it would be strange paying for a service when I could go out and get a CD that I owned for the same price. However, having everything and anything you would ever want is definitely worth it. I think the ulitmate subscription would be to some how have a wi-fi service were DJ's would mix for you but also have on demand for when you wanted to listen to specific tunes. Mkae it nation wide and I'm there.

[snertagert]

Satellite Radio/ Wifi/ipod combined

I thought I wouldn't go for a subscription till XM Satellite Radio landed in my lap. I always figured it would be strange paying for a service when I could go out and get a CD that I owned for the same price. However, having everything and anything you would ever want is definitely worth it. I think the ulitmate subscription would be to some how have a wi-fi service were DJ's would mix for you but also have on demand for when you wanted to listen to specific tunes. Mkae it nation wide and I'm there.

[tinyelvis]

Common Sense

It's common sense. Like I said it's all about economics, volume and time.

Maybe that's a hard concept for you to understand, so let me make it easier.

1. Economics. I can listen to any of over a million songs for 10 bucks a month. The cost of downloads / CDs prohibits you from LISTENING to the amount of music I can. Subscribers can listen to a more diverse selection then you could ever dream of with iTunes or physical media. Even with a budget of $500 a week you will not have scratched the surface of what a subscriber has at their fingertips.

2. Volume. Even if you could afford to buy a library that equals that of a music subscription service customer, where will you put the data? Do you have the hard drive space? Can iTunes handle it? Nope. And if your hard drive ever crashes you're out of luck. My million+ songs can be accessed from any Internet connected computer on the planet. You can carry at max of what, 60 gigs?

3. Time. While you download, transfer and maintain your files I am listening to music. It's all done for me. Also, if I read a great review of a brand new album by a critic I respect, I can search for it and be listening to the full album in a matter of seconds. Then I can make a determination on whether to buy it. You can listen to :30 clips. Lame. When I buy a CD I am 100% certain that it's something I love.

This brings me to another point against your ignorant and irrational point of view. People who use subs also buy CDs and pay for downloads. We are just much better informed customers. Would you buy a suit without trying it on or a car without driving it? Why buy music you are not familiar with?

Simple no?

[cagerattler]

If it's common sense...

Then why aren't subscription services succeeding as well as iTunes?

It's because subscription services and their customers lack common sense.

It's all clear to me now. Thanks for the explanation.

[tinyelvis]

Common Sense

It's common sense. Like I said it's all about economics, volume and time.

Maybe that's a hard concept for you to understand, so let me make it easier.

1. Economics. I can listen to any of over a million songs for 10 bucks a month. The cost of downloads / CDs prohibits you from LISTENING to the amount of music I can. Subscribers can listen to a more diverse selection then you could ever dream of with iTunes or physical media. Even with a budget of $500 a week you will not have scratched the surface of what a subscriber has at their fingertips.

2. Volume. Even if you could afford to buy a library that equals that of a music subscription service customer, where will you put the data? Do you have the hard drive space? Can iTunes handle it? Nope. And if your hard drive ever crashes you're out of luck. My million+ songs can be accessed from any Internet connected computer on the planet. You can carry at max of what, 60 gigs?

3. Time. While you download, transfer and maintain your files I am listening to music. It's all done for me. Also, if I read a great review of a brand new album by a critic I respect, I can search for it and be listening to the full album in a matter of seconds. Then I can make a determination on whether to buy it. You can listen to :30 clips. Lame. When I buy a CD I am 100% certain that it's something I love.

This brings me to another point against your ignorant and irrational point of view. People who use subs also buy CDs and pay for downloads. We are just much better informed customers. Would you buy a suit without trying it on or a car without driving it? Why buy music you are not familiar with?

Simple no?

[cagerattler]

If it's common sense...

Then why aren't subscription services succeeding as well as iTunes?

It's because subscription services and their customers lack common sense.

It's all clear to me now. Thanks for the explanation.

[tinyelvis]

You're hopeless

You're hopeless.

Subscriber growth is excellent.

I suppose by your logic Ashley Simpson is the best musician in the nation since she is currently selling the most?

Get a clue sheep. baaa

[cagerattler]

Wrong analogy

AOL will tell you that subscriber growth is excellent too... so does that make them the best service?

[tinyelvis]

You're hopeless

You're hopeless.

Subscriber growth is excellent.

I suppose by your logic Ashley Simpson is the best musician in the nation since she is currently selling the most?

Get a clue sheep. baaa

[cagerattler]

Wrong analogy

AOL will tell you that subscriber growth is excellent too... so does that make them the best service?