In my previous post I explained how free music services such as Spotify were making premium rental services such as Rhapsody and Napster increasingly irrelevant. Why pay 9.99 for unlimited on demand streaming music when you can get it for free? It seems that Warner Music’s chief executive Edgar Bronfman Jr has had enough, stating that "Free streaming services are clearly not net positive for the industry” and adding that WMG will no longer license to such services.
Such a stance is both understandable and shortsighted.
Services like Spotify and YouTube are crucial tools in helping the music industry transition from the 20th century distribution business of selling units, to the 21st century paradigm of monetizing consumption. On-demand, access based services will be the foundation stone of the 21st century music business. Added to that, the majority of consumers simply have no appetite for paying for digital music, certainly not on a subscription basis. Free and subsidized services are quite simply part of the future.
But, and it’s a big ‘but’, these services and their associated business models still pose many as yet unanswered questions.
Marketers - pay attention. This is an example that seems great in theory, but the "devil is in the details" of the implementation so to speak. This is among the top inquiries I hear from clients, "what do you think about 2D barcodes or QR codes as a means of connecting with customers?" I took this inquiry from a CPG client just a couple of weeks ago. I laid out the challenges. Their response was, "well, we're doing it anyway." Piloting is good - just go into it with your eyes wide open.