Subscription

Ever since Rick Rubin spoke of "subscription" in the "New York Times" the industry’s been buzzing about this topic. But what exactly are they buzzing about?

We need to define terms. Is subscription RENTAL or GETTING A STEADY CHECK FROM EVERY CUSTOMER EVERY MONTH?

If we’re talking rental, I’m laughing. Napster, Yahoo and Rhapsody have proven this is a niche market. No amount of advertising is going to convince the public otherwise. They don’t want ALL the music, they just want what they desire, FOREVER! It may not actually be forever, their hard drive might crash, the format might be superseded, but they want to own it and be able to do whatever they want with it (which is why DRM impedes sale, because you CAN’T do whatever you want with it, not that people want to do much, but they want to FEEL that they can do anything with it, kind of like the kitchen floor of that apartment Meg Ryan rented with her old boyfriend in "When Harry Met Sally", it was great for making love, but they never made love ON IT!)

Used to be we lived in an album world. Our whole business is predicated on this model. Hype one track and then get somebody to purchase a big ticket item. It’s as if Exxon was in cahoots with Toyota. And Exxon had ads that made driving look SO COOL that you had to purchase a car to partake. Gas might only be a few bucks a gallon, but cars are TENS OF THOUSANDS OF DOLLARS!

Or maybe we should change the analogy… To razors and razor blades. The razor ain’t worth much without the blade. But, after you use the blades, YOU THROW THEM AWAY!

We’re not talking CDs here, we’re talking FILES! Do you still have your Microsoft Word documents from a decade ago? You don’t even have the FLOPPIES! They’re HISTORY! The documents were important, but technology moved on. Files are not physical product. You own them, but they’re not FOREVER! The key is how can we get many of these files in the hands of many people, giving them ownership, which is inherently evanescent? And how can we CHARGE for this?

This system already exists. All that lacks is the monetization. This is the P2P world. Instead of suing customers, the RIAA should be licensing them. An insurance policy AGAINST being sued. Sure, not everybody would pay, but many would. Revenue would be coming in instead of going out. It wouldn’t be much per customer, but it would be a lot in the AGGREGATE! There’s your album model… Instead of getting one person to buy many albums at ten bucks a throw, get the people who AREN’T buying music to pay ten bucks a month. And add it all up at the end of the day and you’ve got a huge pile.

Is this a perfect system? Is rental better for the labels? No and maybe yes. But it just doesn’t comport with reality.

If you think subscription rental is the future, then you probably think the surge in Iraq was successful. It will probably be the norm SOMEDAY, but that’s far from TODAY!

This is a read-only blog. E-mail comments directly to Bob.

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