Digital Music Subscriptions – Will They Ever Go Mainstream?
Posted in Music | Posted on 10-16-2009 | 341 views
via Pair Plan Venture to Sell Music Subscriptions – NYTimes.com.
The idea of selling monthly subscriptions to a vast catalog of online music has met with only limited success. That isn’t stopping a new batch of entrepreneurs from trying to make it work.
The latest and perhaps most surprising entrants to the field are the European entrepreneurs Niklas Zennstrom and Janus Friis. In 2001, they created and financed Kazaa, one of the original peer-to-peer file-sharing services that hurt the music industry. The two have created and financed a secretive start-up called Rdio, with offices in Los Angeles and San Francisco.
Rdio and similar start-ups are reinventing a concept pioneered earlier this decade by Rhapsody, a service majority-owned by RealNetworks, and the tamed version of Napster, now owned by Best Buy. A few hundred thousand Rhapsody and Napster subscribers pay monthly fees of around $15 for the right to stream an unlimited number of songs, at any time, from their PCs and mobile devices.
But with modest membership growth at best, neither service has managed to challenge iTunes, with its many millions of users — or enticed music lovers from pirating music. Moreover, Yahoo, AOL and MTV Networks have abandoned their own music subscription efforts.
But as CD sales continue to plummet, and the music industry searches for a profitable future, entrepreneurs with various approaches say they believe they can finally make music subscriptions work. Rdio is hoping to introduce a music subscription service by early next year that offers seamless access to music from both PCs and cellphones. The big challenge will be to get licenses from the major music labels, which have not viewed past digital music efforts by Mr. Zennstrom and Mr. Friis favorably.
“The ironies are very interesting,” said Drew Larner, Rdio’s chief executive, who says talks with music labels are continuing and confidential.
Since they started and sold Kazaa years ago, the founders “have shown they understand content and they have always been up front with the labels about what they are trying to do.”
Mark Piibe, the head of digital business development at the EMI music label, confirmed that talks were under way with Rdio and said there was no reluctance to deal with the pair. “They’re businessmen with a real track record of innovation,” he said. “They are bringing a lot of new ideas to music distribution and there is no reason why we wouldn’t talk to them seriously.”
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