Music, Money, and (Business) Models

Steve O’Hear at last100 provides a useful account of five alternative models for selling music:

  • Free.
  • Pay what you want, with Radiohead of course being the most prominent current example.
  • Pay by popularity, e.g., Amie Street.
  • Subscription. This, and in particular Rhapsody, is how I get most of my music these days.
  • A music tax. There are multiple strong arguments against this. For example, “if a file-sharing tax makes up the majority of the music industry’s revenue, it’s hard to see what incentive there would be for the major record labels, with their huge back-catalogs, to continue to invest in new artists.”

So what are the record labels actually doing?

Instead of recognizing that the record industry’s aging business model… is a broken one and in desperate need of a fix, the response has largely been litigation coupled with the introduction of technology, in the form of DRM, designed to enforce copy protection, which, ultimately, just inconveniences paying customers.

I look forward to seeing posts at last100 and elsewhere about the portable music players that will compete during the coming holiday season. The death of DRM will make this playing field more level, and the prices lower.

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