To Get Paid We Should Set Music Free

Digital music, having started out as a tied product with iTunes and Windows Media locking the files to devices and software players, achieved a certain freedom as DRM came off, but is now migrating fast back to proprietary encrypted formats. These locks benefit only their owners and operators. Switching from Spotify to Rdio, or Rdio to Deezer, or Deezer to Zvooq, means abandoning your library and playlists, and starting from scratch.

It is unarguable that this approach is providing a significant and growing flow of money into the music industry. IFPI reported that subscription and streaming services produced $1b in 2013, and grew by over 50% year on year. In their bid to sign up subscribers these services are innovating rapidly in user experience, and racing to achieve global scale. There’s a long way to go, with around 30m active subscribers across all services. If music follows broadband into the home, there are already about 700m households in the market.

On a standard Rogers model this means that we are out of the ‘innovator’ market and into early adopters. But only just. And the early adopters are very important, as they have the highest degree of opinion leadership. This segment is where a new paradigm flies or flops. And this is where a kind of inverse evolution is at its most dangerous.

Evolution, in the popular phrase, is bad for the individual but good for the species. It is a binary test for specific unfitness. Early adopter markets on the other hand are good for the individual, but terrible for the species. No player has a strong incentive to sacrifice present growth for future sustainability; each prefers to act as a highly competitive individual rather than a category.

And the truth is that the qualities of a successful category are very different to the qualities of a single offering. Choice, variety, many price points, and often some technical compatibility with competitors are what drives adoption into the mass market. In recorded music we have had many iterations of technical delivery, so we know this well. A £29 portable CD player plays the same CD as a top end audiophile model costing £29,000 (yes, they do exist).

This is what we need for digital too if we are to push out of the early adopter market into the early majority. We need the influential early adopters to be saying not that one or other service is great, but that subscription music is great, for all the category benefits outlined above. Music otherwise risks sacrificing its paid-for niche to the irresistible rise of unpaid platforms, and for a far less certain environment for investment in new artist development and high quality music production.

There is a smart way to push this process forward, and that is through library and playlist portability, enabled through a simple metadata file format (the audio itself is becoming ubiquitous anyway so would not need to be transferred unless missing in the receiving service), and a voluntary trademarked scheme for the services themselves. A ‘non-portable’ flag in the original supply chain metadata could allow music owners to offer enforceable exclusives to services if that was seen as valuable. All but the biggest service would have an incentive to participate as there would be more to gain than to lose; a service removing portability in response to losing customers would suffer a big loss in reputation and trust.

Throughout the history of recorded music, innovation that adds value has on balance expanded the market. Cassette tapes made vinyl records more valuable by making the music portable. ‘Rip, mix, and burn’ added value to CDs in a similar way. Millions of tracks available with simple search and click, and sophisticated playlist and library management tools are doing the same in digital music. Giving consumers full ownership over their investment in the time and trouble to learn and use these tools will create more value for them, and more value for music owners and services as subscription heads into the mainstream.

Portability will release a wave of investment in music service innovation to serve all kinds of consumers better, until, as with CD players, it would be inconceivable to imagine a well equipped home without one. It is not particularly challenging, either technically or legally. We should, once again, give music libraries and playlists the right kind of freedom, from restrictions, or risk being overwhelmed by the wrong kind, freedom from payment.

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