Universal and Sony Plan "Free" Music Service

Damon Tog writes "Macworld reports that Universal Music Group has enlisted the help of Sony to join forces in a new music service. The price of the subscription is expected to be built-in to the cost of digital music players, leaving the music 'free' to the consumer. 'The plan is still in flux and faces several hurdles, BusinessWeek notes. Among them is finding a business model that allows the hardware makers to subsidize the cost of the music. In addition, the labels have tried to develop their own online music services before without success.'"

Comments

Re:One thing worth knowing

[whoever57]

How is the music from this service going to be tied to the particular player that is paying for it,

It doesn't need to be tied to a particular player, as long as it it tied to a class of players, all of which include the royalty payment as part of the purchase. Thus, all that is required is an encryption or encoding format that is only licensed to those particular players. Additional measures could include proprietary communication formats between the player and the PC (and between the PC and the music store), combined with the requirement that a player is connected to the PC before the PC is allowed to download anything. The real question is: how long will it take DVD Jon to break the encryption?

The most important question is the one that the major labels always forget to ask: what value does this bring to consumers? With Amazon selling MP3s, why pay $100 extra for a player, which is designed to break in 18 months?

it's en fuego

[User 956]

Macworld reports that Universal Music Group has enlisted the help of Sony to join forces in a new music service.

Initial reports indicate this offer is really "heating up", but that's only because the music players use Sony batteries.

Re:One thing worth knowing

[Spasemunki]

... and the other question that immediately presents itself: when the partners involved in this deal lose interest after a couple years of lackluster sales, what will become of that nice device that you paid for- probably paid a lot for, given the "built in" subscription cost? Will you be able to load music onto it from other sources, or will it be bricked once the associated service is shut down?

"Free" as in "Sony"

[CleverNickName]

So we have:

• Free as in speech (you're free to do what you want with it)
• Free as in beer (you get it for free)
• And now there's free as in Sony (we're free to fuck you after we have your money)

No thanks, Sony and UMG. Fool me once, can't get fooled again.

This is actually a great move

[Budenny]

This is a great move, because it will reveal the absurdity of the present locked player situation. Its a classic stage in industry evolution. Stage one is, some company (Apple) comes out with a format for purchased tunes which will only play on its own player.

This creates two incentives. The first is to increase the sale of tunes, since the other players depend on the tunes not the player as their main business. So they want more tunes sold. But as long as there is an Apple monopoly of sold tunes, this isn't going to happen, and there is nothing they can do about it.

The second incentive is to compete with Apple as a retailer.

So, because of the success so far of the Apple strategy, all they can really do is emulate it: come up with another store, another player, a different format, and tunes locked to it. Since they have to overcome an incumbent, they will be reduced to making his attractive by initially lowering the price of the tunes and using a different locked format, to make people use their player. This will be a replay of competing format wars that we have seen with hardware formats in the past.

We will then move to the stage, which we have seen previously in media with different consumer formats, where consumers still refuse to buy the stuff because they hate incompatible formats. After a while of this an unlocked standard will emerge. I don't mean a standard that is not copy protected, but one does not lock purchased tunes to players from one particular vendor, or make them be purchased by one specialised bit of software or currency. It will work just like CDs and DVDs do now: buy your content wherever you want from one of a variety of independent outlets, using whatever payment means you want, and play it on the player of your choice, from one of several manufacturers.

The Apple strategy has worked well for a while, but it has within it, like all DRM based attempts to tie up your use of what you buy, the seeds of its own destruction. It is not a sustainable business model longer term. The present model for music and CDs was. The only thing that is destroying it is overpricing from the content publishers.

Apple is far better placed to deal with the implosion of the business model. Its trivial to take locking off the iPod and iTunes store. And if the money falls out of the tunes market, it hardly affects them. For the content owners, their whole model is falling to bits in well defined stages that we have previously seen in other format wars. It is what is coming towards us.

IDDIIIIIOOOOOTS

[eiapoce]

My reply comes late and will be short. By reading the article you can get clear hints that iTunes is going to be the market leader for a very long time. I summarize them:

• "Sony said recently that it would abandon its proprietary ATRAC copy-protection technology, and add Microsoft's Windows Media ... close its Connect Music Store". Translation - Fucking customers who bought previous players and registered the service.

• "MTV Networks said it would abandon its own digital music service, called Urge, and pool its efforts with RealNetworks' Rhapsody" They fare even better, close the store screwing registered users and then as if this was not enought join forces with the most unsuccessful, worse DRMd and worse marketed player of all times

• "get hardware makers to absorb the cost of a $5 monthly subscription" Selling hardware that works only on a rent basis!!! This is funny, I don't know anyone willing to buy somethin like that.

• "CEO of Universal Music's [says] the share of revenue that Apple collects for each song sold on iTunes is "indecent,"" Labelling competition bad names instead of competing.

• "the labels would like to charge different prices for new and older music" Now in economics this has actually a name. It is called market segmentation and is the most known way of screwing costumers by raping their surplus.

• "nurture the adoption of other music players such as Microsoft's Zune": History teaches us that any business that made deals with microsoft has to face 2 quests. The first is to win the market. The second is avoiding MS to take over using anticompetitive practices and lawyers. By judging how they are dealing to the iTunes quest I guess those idiotic CEOs are deemed to fail both.

The real question is: who put them in charge? Their proposed exit strategy for media distribution sounds as "shoot us in the leg". If I had any stok or option on those companies I would consider selling them now before is too late.