The Financial Times is reporting that Apple is in discussions with labels about a plan to give purchasers of a premium priced iPod unlimited access to iTunes. The plan is similar to Nokia's "Comes With Music" and Universal's "Total Music"; both of which are also in discussion. Nokia reportedly is offering to split $80 between the labels while Apple so far has only offered $20.
COMMENTARY -
But "pay once and listen forever plans" are bad for music and the music industry.
- How can $20-$80 properly compensate the songwriters and performers of the thousands of tracks that would now fill the typical iPod?
- However creative label lawyers may be, how can this model fit with past or current recording and publishing contracts or government mandated royalty payments?
- Who will decide how the money is divided and when it is paid?
- Will this result in artists receiving less money from those fans willing pay?
- What are the unforeseen consequences of the music industry once again ceding control to device manufacturers and technology companies?
Labels are talking to Apple and Nokia in part because subscription music has failed to gain traction. But with ongoing issues of ease of use, compatibility, and portability; subscription music has not been given a fair chance. Even Apple is looking at iPhone music subscriptions as an add-on to monthly
service payments.
Many argue that getting some money for music is better than no money. But as bad as things seem, this industry still generates hundreds of millions of dollars in sales. Is this the right time risk devaluing music further?
Instead of offering music as "pay once and hit the buffet table as often as you'd like forever", there other avenues that deserve serious exploration. Ad-supported music may be part of the answer. More broadly, better serving the consumer (aka fan) is central to the industry's future. Marketer Seth Godin wrote about artists building and monetizing their "music tribes" and models like Trent Reznor's multi-tiered pricing and Radiohead's "pay what you want" release have produced impressive results.
Just as foodies skip the buffet and pay premium for gourmet, real music fans will support their pleasures with their wallets if they are offered to them properly. Until the industry understands and respects the bond that music creates with fans, no price will be too low.
