Music Consumption – Interop, Lock-in, Business Models


Before I write word one on this topic it is important to say that these are my personal observations – have nothing to do with my employer (Microsoft) or any particular industry expertise I may have. Also, this is something of a break from my ongoing writings about Open XML and document formats.

Over the past two years I have been the very happy owner of a Creative Labs Zen Micro, and have been an URGE subscriber. Recently I was notified that the URGE service was terminating and was redirected to Rhapsody. Given my experience with Rhapsody, and the incredibly cool iTouch from Apple I was shown – I’ve started to look around and reconsider my method of getting and listening to music.

What it comes down to is that I have realized my initial attraction to the physical device (from Apple) is nothing compared to the business model of the music service and the subsequent effect that has on my music consumption patterns – ultimately, that is what I really care about.

So, my completely lame understanding of my choices are:

1) To completely rely upon CDs I already own and those I choose to buy – and then to rip them to my device. If this were the path I went down, then I would absolutely choose the coolest, most elegant device.

2) Pirate everything – use P2P file sharing networks and don’t worry about a given service. Again, if that were my choice I would go for the coolest device. But, this doesn’t work for me because I am a strong believer in the value of IP – really. I don’t pirate music, I don’t pirate movies, I don’t pirate software. My livelihood is tied to people respecting software IP – so I reciprocate that belief.

3) Purchase my music on a per-track, or per-album basis from an online service. This is fundamentally the translation of the model behind option 1 above into a digital, connected world. So, I should go for the coolest device and the online store with the most choice. That would seem to be an Apple-favored decision again.

4) Subscription – a completely different business model being applied to the music consumer experience. I pay $x per month and get unlimited downloads – but, if the service goes away (like URGE just did) I am sitting there with album covers and songs but no permissions to listen to the music. On the other hand, the benefit to a subscription is that I can experiment with new music, books, comedians, heck – I even downloaded a Noam Chomsky speech – with no additional fees.

To me, I am stuck between option 3 and 4 from my list. The fact is, for me, that a cool device is really not that important. The quality of the sound matters – and the ability for it to store lots of music. But that is baseline at this point for all players on the market. Ok, so then it comes down to how much I will spend over time and the implications.

Interoperability – this is a big topic for the European Commission and Apple these days. Clearly I am going to stay away from any discussion of the EC and interop given the news of late regarding MS. And, the business implications of the interop discussion with music, DRM, and business models is a huge, complicated one. It is best left to those who know the ins-and-outs of that discussion.

Lock-in does concern me though. If I buy and Apple device, connect to the Apple store, and start dropping hundreds of dollars into songs in Apple’s format, then it would seem I am suddenly going to be facing huge switching costs/pain to move away from them. (I know, the irony is thick on this one.)

Moreover, the expense concerns me. I am a huge fan of pandora.com and liveplasma.com to help me find new bands or artists to try. In a given month on Urge I was downloading 40-60 new tracks, never mind the fact that I like to work out to stand-up comic routines (makes time on a treadmill or stationary bike fly by) and was downloading 5-10 albums a month just for that. So, that would be approximately $80 or more a month going to the iTunes super-store.  Most of that music is experimental to me and I end up deleting large quantities of it.

So, I seem to be talking myself into analyzing the subscription options out there. If anyone has the inclination to point me towards some info on this I would greatly appreciate it. – thx.

Comments (9)

  1. My choice is just to limit my music purchases to companies that don’t try to lock me in – I buy all my music from Amazon MP3. Then I can buy whatever device I choose to, and I can count on support for the music I buy to continue indefinitely.

  2. jasonmatusow says:

    Stuart – how does that leave you for experimentation with new music thought? My challenge is that I’m ok with buying the tracks I want to listen to for a long time, but there are many cases where it is only have the 4th or 5th time hearing the song that I really being to like it. For example – the album Hold On Little Tomato from Pink Martini was not something I liked much the first time I heard it (with the exception of one or two songs), but after listening to it more I have grown to really like it a lot.

    There are two things that are important to me. Up front ability to listent to unlimited tracks (full track, not 30 second trailer), and then the ability to choose what type of device I want to use.

    I like the thought of the Amazon options – I’ll have to look more into that. But there is still the challenge of the experimentation.

    thx

    Jason

  3. Dan says:

    You’d probably find Magnatune’s business model interesting (magnatune.com).  You’re not going to find much mainstream music there; nevertheless, they have a quality selection.  You can listen to the music as much as you want without buying, and if you decide to purchase the music, you get DRM-free MP3s and you choose the price you want to pay.  Also, doesn’t Pandora or Last.fm provide a pretty good ability to sample new music without needing to pay for subscription services?  

  4. hAl says:

    For option #4 the Zune is probably a good appropriate player.

    http://arstechnica.com/reviews/hardware/zune-redux.ars/1

    You could probably get it fairly cheap…?

  5. jasonmatusow says:

    Thanks Dan – I will go and look at Magnatune.

    hAl – yes, I have been looking at the Zune as well. My personal feeling is that the device is not as nice as the iPod, but the subscription is attractive. Unfortunately, I don’t think I get a break on the price (don’t get cheap xBOX hardware either) for the device. Software is cheaper than retail.

    thx

    Jason

  6. jasonmatusow says:

    Dan – also, I love Pandora. I use it to find new bands. I also use LivePlasma.com for that too.

    Also, if you are reading this thread – you may want to check out my second blog on this topic…

    thx

    Jason.

  7. (If you haven’t left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won’t appear on the entry. Thanks for waiting.)

  8. Audio says:

    Before I write word one on this topic it is important to say that these are my personal observations – have nothing to do with my employer (Microsoft) or any particular industry expertise I may have. Also, this is something of a break from my ongoing