Archive for the 'subscription' Category

Cloud Computing is more of a Reality than we think…

October 28, 2008

I was just thinking again about this post from Kevin Kelly a few days ago. This whole scenario about cloud computing sounds a bit “Science Fiction”… but actually it isn`t …
Even Microsoft is starting a big PR campaign now around it`s new platform Windows Azure… ” the future is cloud computing”…. so it`s going mainstream, although most internet users are still unaware of the term “cloud computing.” They are already taking advantage of it more than they know.

When we talk about cloud computing we mean an architecture by which data and applications reside in cyberspace, allowing users to access them through any web-connected device. This includes: webmail services like Hotmail or Gmail; personal photo storage services like Flickr; online applications like Google Docs and Photoshop Express; video storeage and publishing services like Youtube; blogging platforms like WordPress; social bookmarking sites like Delicious; social networks like Facebook; and of course online servers where you can backup your harddrive or any other personal files..

The PEW Research Center published in September 2008 a study stating that 69 % of all Internet users have either stored data online or used a web-based software application. If you think of the list examples above, you would think it would be even more…

… and it should be just a matter of time for people to accept that cloud computing is superior to desktop applications in all areas of software or media usage and so the hardware industry will respond on it with new devices. Mobile device of all kinds will profit a lot from this developement.

Of course people have many concerns about cloud computing like security and privacy, but there will be some solutions to give the users a “safe feeling”. …  anyway, this will be a big challenge.

So cloud computing is coming fast… what does this mean for the media industry?
A lot especially for the business models. In a cloud computing world, “owning” content is not a thing you will think about anymore, since that was part of the physical media world. You will just desire access to content. That´s all you need. So the cloud computing system and all it`s advantages for the users will push the developement to “The Age of Access“.  Ad supported content will be huge, especially cause of the big opportunities in personalized advertising. Cloud computing is the perfect and most efficient environment for personalized advertising. Social communities and social production will be more efficient than ever before. And that`s just the obvious stuff. If you read the post by Kevin Kelly you will find many more ideas for all parts of the media industry and how it will change in a certain area. I will try to do more research on this stuff…


The Impact Of Unlimited Music Subscription Services

October 4, 2008

Nokia and Sony Ericsson are on the verge of releasing their mobile subscription services, so the chance for unlimited subscription music services to go mainstream is on the horizon again… and as always the question arises: Which impact will “mass market” subscription services have on the other distribution channels?
Some people in the industry fear that a “mass market realistic” subscription pricing offer could cannibalize their CD sales and their digital download sales much stronger than their outcome might be through the new channel (Itunes is the best example).

But I think they are missing one important thing. Subscription services are a good and maybe the only chance to get “active file shares” back on the pay bill. The opportunity to get this very active and important music target group back, should be a bigger goal than the fear of cannibalization. Besides I don`t think the cannibalization will be to high, cause cd buyers won`t change directly to a subscription service and “a la carte” customers will maybe leave on average more money as a subscriber… but that is just my first “gut feeling”. Let`s see what some first numbers say..
There were two new survey released on this theme. One I found via Coolfer it`s a study by TNS Technology released a month ago where TNS interviewed more than 1,000 people aged 16 to 64 about unlimited mobile music services. The survey found out that when presented with an unlimited service, 45% of users would buy fewer CDs and 47% would buy fewer digital downloads from online stores. But 38% also said they would reduce their use of illegal file-sharing sites.

The other survey was released by Jupiter Research titled “Subsidized Mobile Music Subscriptions” and tries to find answers on key questions amongst others like “What impact will subsidized services have on the relatively broader European digital music market?”
For me the “keyfinding” of this survey to the question above is: “Just five percent of Europeans said they would pay for subsidized mobile music services, but more than one-half of them are file sharers.”

So, of course the question cannibalization vs. “new customers from the piracy segment” is not answered yet… the Jupiter survey makes hope that there is a chance to mobilize the piracy segment …maybe there are  more figures coming soon…

Music Access as Product Bundle

September 24, 2008

Sony Ericsson announced today more details to their new unlimited mobile music service. PlayNow Plus will launch in Sweden by the end of the year and will be available globally next year. Reuters reports, the service will cost 99 Swedish crowns (US $15.24) a month. Subscribers can download an unlimited number of tracks to the handset or to a PC. The handset will sync with the PC using broadband and 3G/HSDPA connectivity.

So here we go. After Nokia, Sony Ericsson is now the second big player in the game. We are just waiting on the iPod subscription bundle and then the transition is officially started. We are on the way to the “music age of access”.

Subscription services didn`t get a huge success on their own yet (like Rhapsody and Napster). But maybe they can find success with a device bundle. Of course there is the second big business model “Free”  with ad supported versions like Last.Fm or MySpace Music and there will always be the illegal “darknet” p2p version of music download, but getting your adored “high end” device subsidized is a big lure for many people to make a subscription contract. I´m sure there will be some devices exclusive with the subscription bundle comparable to the iPhone & mobile provider deals at the moment. If you`ve signed a contract and the music service is great, you wouldn`t want to loose it, because it`s “so convenient”. And most important, the service will “feel like it`s free” after a while.  At the moment, the price per month is still a little bit high, but when the price falls to 5 or 7 Dollars per month, many people really won´t care about this addition to their monthly mobile/internet bill.
And at this point there always comes the obligatory question: Do you know how much money you spend for water usage at home every month? Did you ever care about water costs standing under the shower?

Three Business Models Of Free

September 14, 2008

Found this basic thought on Chris Anderson`s blog
If you want to make money with free products, you will have three options for your basic business model.

Of course you can combine this models. So everybody who tries to make money with media content will basically play in this area in the future. It´s as simple as that. Well it isn´t…

Sony Ericsson Comes With Music…

September 10, 2008

So, after Nokia, now Sony Ericsson starts with this subscription, or better, bundling pricing model (see Financial Times).

As you know I’m a fan of these business models… they “feel like free” and if there is enough added value they will have a chance to compete with the “free” alternatives. A crucial feature will be, if there is any portability of the music. Is there any chance to get this music from my mobile phone also on my big speakers in the living room? Is there any chance to hear the music in the car? et cetera… but of course the most important point is the price question: Where is the price point to have still this “feeling” “like free”?

Rafe Blandford did a bit of pricing research and showed that Nokia’s Comes With Music adds about 70 to 85GBP (US$123 to $150 or 85 to 105 Euros) to the price of a handset for a year music. That´s less than 10 Euros per month. For someone who is not an active “darknet” downloader and maybe iTunes customer… this is a reasonable price, if there is this mentioned portability. We will see.

Well, now we are waiting on the reaction of apple. When does the ipod or iphone come with a music subscription? I hoped Steve would announce it at his September keynote… but unfortunately not. Anyway there are this rumours it will come soon and the price will be around $130 per year…
It would be a lot of fun to use this new recommendation system “Genius” on ITunes 8 with a subscription model on a iphone…

The time of “a la carte models” in the music industry is ticking…

Itunes Finally Goes Subscription? Too late?

August 30, 2008

Well the rumour leaked already last week… for the few that didn`t heard it: The baby is called Itunes unlimited… and according to an anonymous source, the subscription service will feature on-demand songs at 256 kbps and cost $130 per year, or $100 for existing MobileMe subscribers. It will come in fall …

We have been talking about this for years now… and finally it`s coming…

Why am I posting this? … Cause I was thinking again about this Google China music service… that`s where we are heading… The Itunes price point is too high… it doesn`t “feel like it`s free”. I don`t have the data but I think there is a big risk that ITunes will cannibalize their own “a la carte” download revenue, while not getting any new customers… well we will see…

120 Dollar For Unlimited Music On Your Mobile?

April 22, 2008

Today SonyBMG said yes… and it seems finally that Nokia’s “Comes With Music” project (more here and here) could launch with a “big library of songs”.
For some days now there are new rumours about the pricing of the service . You can find a short update/summary via Coolfer.

When Glenns calculation/assumption is right the on top price per handheld could be round about 120 Dollar… 10 Dollar per month… seems like a high price for me…
Well… if I would be able to connect my home-audio-system and my car with my phone… maybe…

… but I think you won’t get the young people… students, pupils… maybe some business guys… no time, enough money..
… on the other hand the kids spend incredible much money on ringtones…

We will see…

Apple Finally Did It

March 21, 2008


I know, the news is from yesterday… but waiting for years… I am excited…

Here it is… Apple goes subscription! Steve changed his mind.  Bundling will win the “paid  content music game” (why? ).

The Itunes  store and the brand Apple have a good chance to survive against the “free competition”. For the rest … the quality level is high now.

2012 Music Money Goes Digital – Now There Is Movement

February 20, 2008

Forrester Research has a new report with the titel “The End Of The Music Industry As We Know It“. According to this report digitally downloaded music will surpass physical CD sales in 2012.

Here are some free slides (ppt) of the teleconference to the report release.

Perhaps it´s numbers like that, why labels finally are talking now with a lot of people in the digital area about new distribution models … and about more serious conditions…
So for example there a rumours since last week that MySpace is making a deal with the labels to get DRM free ad supported downloads on their site. Omnifone launches a new mobile music subscription service bundled with a handset (similar to Nokia’s model)… not mentioning the Last.Fm thing, the Google China talks… and so on… news coming in weekly… there is movement now…
What about Apple? I am looking forward to here some news from there…

So fact is, in the next months there will develope a lot of new ways to experience music, legal music, and often free or feel like free music. What could happen?
Customers could get confused. Which model is the right one? Where do I get a good deal? What is free what not? What is legal and which services or applications are not? Is there any difference? Do I have to pay for music?

Studies like this (from KRC for Microsoft) show that most of the young users still don`t think they do something like stealing in the net.

So this new developement, this confusion, won`t change this “thinking”. So … Do pay per download models have any chance in the future?
And here we are back at the Forrester Research report. They say subscription services won`t make it till 2012 – Digital downloads will make the race.


Well, I am not sure about that. I don`t know when subscription services finally can handle their problems, but I am sure that “feels like free services” and ad supported models will grow. Why should digital pay per download models grow so fast?

Well… but what do I know…

Last.Fm Offers Full Subscription Service Soon

February 7, 2008

A short update to my post a few days ago:

I just saw it on my account: There will be soon the option to subscribe to an on demand subscription service on Last.Fm. For just 2,50€ per month you will get unlimited on demand access to the complete music library. The price is awesome. We have to wait, how exactly the package will look like, where you can use your songs… but that`s a price that looks good. Problem anyway: Music for your mobile device… not included. So it`s still not the “one stop shop” solution.

Update: Sorry guys, the price up there wasn´t right. I confused the subscription price with the “old” subscription package with just better user rights and features. So there are no infos about the new music on demand subscription price, yet.