October 14, 2007

Word of Total Music had already broke, but this BusinessWeek.com article has new details about the in-the-works music service. Universal Music Group's Doug Morris is gathering support for a subscription plan that would be free to consumers and paid for by the manufacturers of the compatible devices.

"BusinessWeek has learned that Morris has already enlisted Sony BMG Music Entertainment as a potential partner and is talking to Warner Music Group. Together the three would control about 75% of the music sold in the U.S. Besides competing head-on with Apple Inc.'s music store, Morris and his allies hope to move digital music beyond the iPod-iTunes universe by nurturing the likes of Microsoft's Zune media player and Sony's PlayStation and by working with the wireless carriers. The service, which is one of several initiatives the music majors are considering to help reverse sliding sales, will be called Total Music. ...

While the details are in flux, insiders say Morris & Co. have an intriguing business model: get hardware makers or cell carriers to absorb the cost of a roughly $5-per-month subscription fee so consumers get a device with all-you-can-eat music that's essentially free. Music companies would collect the subscription fee, while hardware makers theoretically would move many more players."

There are two ways to react to this: Either fault the companies for trying to work around and lessen the power of Apple (and therefore cut themselves off from consumers already proven to be valuable in the digital age) or acknowledge the plan's breadth and this-just-might-work marketing hook.

Americans have given a vote of indifference to music subscription services and have sided with the iPod/iTunes model. Morris obviously needs to find a way to overcome this problem if subscription services -- thought by many executives to be labels' saving grace -- are ever to take off. The Morris plan is a leap forward because music companies are finally treating their product as a service and looking at the best way to get it into the hands of music lovers. The best way is to make the product feel free -- much like a file-sharing service paid for by ISP taxes would feel free. Working with hardware manufacturers is a surprising stroke of near-genius. If the digital music era has shown us anything it's that people are motivated by the hardware, not the services. Of course, relying on the efforts of hardware makers could be a problem if Apple's competitors continue to play catch up to the iPod.

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Posted by Glenn at 9:34 PM | |