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Air WavesLast.FM Sees Sales Benefits From Full-Song Streams
Last.FM is reporting that its full-track streaming feature has boosted music sales by quite a bit over the last 12 weeks.
Last.FM’s Martin Stiksel:
In just over two months, it’s become clear that people will buy CDs and downloads if they get access to the kind of service we offer.
I do believe it to some degree, it’s just plain common sense. People don’t often buy music blindly any more. And sorry, but offering only a few seconds sampling of a track is about as worthless as no sampling at all.
B-but, you say, if the people can listen the whole track streamed for free, why would they want to pay for it? Well, for now at least, the answer is portability, of course. People want to listen to their music wherever, whenever they choose. And that’s why “ownership” works now in Music. But underlying that portability, at the root of the matter, is really convenience. Whatever is easiest, whatever is most convenient, is what wins. And we’ve already started to reach that tipping point where “owning” all your music, that is, managing thousands of files, enormous multi-gig libraries, various ipods / cellphones / computers etc, is starting to kinda be a drag. Wouldn’t it be so much better if you just had one device, and you could (streamingly) listen to anything you wanted, anytime, anywhere? I know, I know, the “Celestial Jukebox” is a very, very old concept, and plagued by the issue of “how do artists get paid,” but I think it’s inevitable. (FWIW, I still believe that a monthly charge is not such a crazy idea. Seriously, you don’t even think twice about it, but how much do you pay EVERY month for cable? For Internet? For Cell Service? )
Oh, and does the existence of the Celestial Jukebox mean that suddenly all ipods, cd players, and vinyl records disappear from the face of the earth? No, of course not. Those would still exist for folks that wanted them– but, the thing is, there are more and more folks out there every day who don’t want to have to deal with any of those formats. There are easier ways for them to get to the music they want to hear.
Canny VC guy Fred Wilson, a guy I’d like to have a beer with, has the right idea in his “Something Important Is On The Horizon In The Music Business” essay from a few days ago.
I’ve said before that Steve Jobs’ proclamation, “People want to own their music” was true WHEN HE SAID IT, but that it becomes less and less true every day. I still believe that, only, damn, I didn’t realize how fast this was all going to move.
5 Responses to “Last.FM Sees Sales Benefits From Full-Song Streams”
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April 9th, 2008 at 8:14 pm
It’s about time re: the comments section opening up. But is it going to close right down again or is this permanent?
The monthly charge idea is flawed for the masses of people in the U.S. I don’t think they’ll tolerate another monthly charge. Ah…but you say they already do pay for cell, cable, internet. That’s true but they also value those services/products more than they do music, I think.
April 9th, 2008 at 11:44 pm
The value factor of music would vary from person to person like with all those other services/products. I know various people who see no value in cable/Internet/etc and gladly live without that service. And not tolerating a monthly charge will be a short-lived issue with some. After all, look how many people pay however much it is a month for their World of Warcraft accounts, just seeing it as another utility.
People who purchase a lot of music and don’t feel like that have a loyalty to a specific format will gladly pay a monthly fee if it’s cheaper than purchasing several CDs or songs off iTunes or what have you.
And living in a culture that is so ready to buy a product for it’s gimmick (It’s a Cell phone AND a camera?! I don’t take a lot of pictures, but now I will!) the right marketing team would find a way for people only half interested in the concept to purchase the service.
April 10th, 2008 at 7:41 am
As usual, I mindlessly subscribe to everything Ryan Catbirf says, but I must admit, I do think twice about my cable and cell-phone bills. Maybe more than twice. Those bills are crazily high. I do not think twice about Netflihhh, however. So, that probably says as much about me as economics. In any case, the price has to be sensible (i.e., cheap). Part of the problem with the music industry has to be its greed, right? Remember when CDs originally came out, and they insisted the $15 tag would come down, and then it..uh…didn’t (except for cut-outs and nice price). Those goons think they’re big oil or somethin’. What would a big oil subscription service look like? Dear rock-and-roll, don’t do me like that.
April 10th, 2008 at 9:04 am
“What would a big oil subscription service look like?”
Ask Dick Cheney
April 10th, 2008 at 12:07 pm
The thing with the monthly charge debate is that it’s usually positioned as something that *everyone* on the internets would be required to pay for, and that everyone would pay the exact same price for the exact same service. For something like that to work, it would need to be a tiered offering, much like the wireless, cable and internet services. There’s bunch of different types of consumption patterns out there, and the plans would have to reflect that. You’d need a cheap, limited catalog offering. You’d also need a deep catalog offering that would be premium service. I’m guess you’d need different tiers of quality too (mp3 vs lossless).
My point being, there’s gotta be a real market for an unlimited monthly charge (uh, subscription) service… but there’s a bunch of complexity that needs to be addressed. One size wouldn’t fit all… and this is a business opportunity.