I believe one of the greatest challenges for the music industry in the coming year will be to begin to tackle consumer perception that there is such a thing as ‘free’ music.
As the previous decade witnessed a rise in free digital music services, my greatest fear is that there are now too many free messages in the space to keep music truly valuable in the eyes of the listener.
I think the biggest challenge for the industry in the coming 12 months will be how to negotiate what has been the ongoing consolidation of the digital music industry. The last few years have born an explosion of new services which have been absolutely key in the continued growth of digital music, as music lovers search for new and exciting ways to explore, discover and listen to music across a range of devices and platforms.
But with this explosion comes fragmentation. New business models are arriving, amongst which the ‘freemium’ service model has been naturally and powerfully adopted by consumers. Yet the ongoing momentum of that model does not have longevity and my greatest fear is that there are now too many ‘free’ messages to keep music truly valuable, as it should be, in the eyes of the consumer.
As an industry, the digital music space underwent key change and growth over the course of the past decade. Evolving from the first early appearance of Napster, which for the first time created a social community online for people to share, exchange and discover music, through to Apple’s iTune’s which provided users with an online platform to buy tracks and albums, and most recently the numerous launches of a host of innovative online music services. All aim to give users different music experiences.
The past ten years represent significant change for the digital music space. As a business Napster has been at the forefront of that change. In its original form, it was the first service to create a platform online that allowed people to search and find music, engaging millions of people.
We don’t deny that free music was part of that story. Yet it was never going to be a sustainable model, which is why the evolution not just of Napster’s service but of services like Apple’s iTunes, which did a great job in giving users the opportunity to buy music legally but also with a great music experience, were and remain to be fundamental in supporting the complete music ecosystem – the artists, the labels, the retailers.
The shift in perception by the labels proves the way that times have changed – evolution of digital music is not the same or as simple as early changes in music form, such as vinyl to CD. As the Internet has created a far more interactive playing field selling to an online consumer is no longer simply a case of changing the format of the product. Enriched, value-add services are vital to engage with today’s music consumer.
Product configurations with online music are completely different to what you would get if you were buying a CD in a record shop. The music industry, artists and managers now recognise that their online fan base is a fundamentally important tool. The Web 2.0 landscape has created a more ‘familiar’ territory for consumers where they feel they can bring themselves closer to the artists and music that they love.
Music social networks such as MySpace for example, allow fans to engage with artists in a way that they couldn’t before. Music has become an experience beyond just listening. It is feature rich, interactive and exciting.
The debate around free versus subscription services is one set to evolve over the coming months and something which all parts of the music industry must take note of.
If users no longer believe in the need to maintain the ecosystem that is required to inspire and support new and existing artists and labels because they are getting something that they perceive to be free, somewhere along the way something extremely valuable may be lost. This discussion is one that must be addressed by all parties in the coming 12 months to ensure that the value of music is recognised and prolonged.