US personalized online radio provider Slacker has thrown its hat into the on-demand music ring by launching a $9.99 a month on-demand streaming music service with offline playlists. Yes, that is indeed akin to launching Spotify in the US before Spotify does. You can just imagine the grin on some of the faces on both sides of the negotiating table when Slacker tied up this deal with rights owners . . .
So, would-be US music subscription customers are now spoilt for choice, with the top-tier options including stalwarts Rhapsody and Napster, newcomers MOG and rdio, and now Slacker. The only problem is that US consumers are lukewarm about subscriptions. No US service has broken the 1 million paying subscribers mark, despite years of trying, and others have simply given up completely, including the heavily funded Yahoo Music service.
Slacker will rightly argue that it is entering the market with a differentiated mix of complementary tiers: its free, ad-supported Pandora-esque personalized radio tier is a genuine complement to a premium on-demand tier in the way that a free, ad-supported, on-demand tier a-la-Spotify is not. The former helps drive discovery and meets different usage needs, while the latter is just a watered-down version of the premium tier.
But that still won’t be enough. The premium subscription market hasn’t failed to break through to the mainstream for all these years through a lack of availability or the quality of services (Rhapsody still makes a pretty good claim for being the best programmed music service out there). The reason consumers have held back is simple:
$9.99 subscription rentals are not a mass-market value proposition.
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