Has the countdown to the end of the 99 cent download begun?
Leaving aside the fact that yesterday’s announcement by Universal Music and Virgin Media that they’re going to be launching an eat-all-you-can download service in the UK is about 10 years too late, it’s clear that we’re finally seeing some sense …
Leaving aside the fact that yesterday’s announcement by Universal Music and Virgin Media that they’re going to be launching an eat-all-you-can download service in the UK is about 10 years too late, it’s clear that we’re finally seeing some sense developing in the record business.
Of course, there are lots of details which won’t become clear until the service launches later this year – like the price for a start, though the Guardian reckons it will be about £15 a month – but the basics are in place. Virgin Media users will be able to stream or download as much of the Universal catalogue as they wish for a monthly fee. That’s as much U2, Kanye West, The Killers, Razorlight, Elton John and The Saturdays as you can take. The ISP is also in talks with other labels so they may well have more catalogues to offer by the time they press the start button. It’s a take on the subscription model which so many music business observers have been talking about for years – eMusic with no (no) limits, if you like.
There’s a quote in the press release about how both parties believe the move will bring about a “rapid and permanent change” in how people buy and listen to music. That’s a bit of an understatement, if the service is as good as it sounds and doesn’t turn out to be another record biz pig-in-a-poke. As we’ve discussed here (and here as well), services like Spotify and, now, Universal-Virgin may well be the way forward. They show the industry finally accepting that sending in the lawyers with cease-and-desist letters is not going to stop illegal file-sharing. Hell, nothing is going to stop file-sharing. The only thing which may persuade some illegal file-sharers to pay for their music is to provide a legitimate, easy-to-understand alternative. Enter Spotify, Universal-Virgin and a plethora of others which may well be waiting in the wings.
Naturally, I’d give anything to see the maths behind all of this and find out how much the label expects to make from this deal. You can be sure that Universal are charging a high premium for access to the farm, especially when (see next paragraph) they can expect to lose a sizable revenue stream from the download stores. You can also be certain that the money-men behind Universal’s premier league signings have already renegotiated contracts to reflect the new realities.
But perhaps the most interesting aspect to all of this is the positioning of such subscription services as iTunes-killers. While there’s no doubt that Apple’s Steve Jobs provided the record industry with a get-out-of-jail-free card when he put the iTunes store online in 2002, few of the deal-makers saw a situation emerging where Jobs, their one-time white knight in a black polo-neck, would change the game in the way he did. They’ve been trying since then to win back that leverage and it’s subscription services like Universal-Virgin which may well turn the tide in their favour. After all, if you can download or stream all the music you want, are you really going to be ponying up 99 cent a pop for a MP3?