Wednesday, December 5, 2007

Easy As MP One, Two, Three

Another French internet service provider, Alice, has come out with a free music download formula. For the price of the basic service package, new subscribers will have unlimited access to EMI's catalogue, for their computer and up to three mp3 players. The one wrinkle is that the files come embedded with Microsoft's DRM system, so they're not compatible with either iTunes or iPod. A spokesman for the company added that come 2008, for an extra 10 Euros, subscribers will have access to Sony, Warner and Universal. The offer comes in response to Neuf's recent formula of different levels of access to Universal's catalogue. That deal, which guaranteed Universal exclusivity for six months, will soon open up to other labels.

I'm a bit out of the loop with what's going on in the States, so I don't know if this kind of deal is already standard fare for American ISP's. What's becoming increasingly clear is that the entire landscape of music delivery is changing so rapidly that the early adapter companies will in some ways suffer from their innovative ways, on both ends. Those paying licensing fees to bundle music in their products or services can get locked in to limiting deals. And the majors have to be careful about not giving away the farm to any single licenser. If everyone can download free with an internet account, they have no incentive to pay slightly extra for an mp3 player that comes with pre-licensed catalogue downloads.

The music industry has been suffering (from self-inflicted wounds, in my opinion) for so long that they're in a rush to recoup some cash. But if it doesn't think through how this is all going to play out in the next five years, it will end up with end consumers saturated with offers, and little demand.

Posted by Judah in:  Arts & Letters   Markets & Finance   

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