MusicStation's flat-rate mobile music service: a tax on people who are bad at math
Omniphone appears to have decided to make some hay with the upcoming iPhone hysteria by promoting its own European music subscription service for cell phones. Now to date, music subscription services have gone precisely nowhere on PCs and mobile devices, but Omniphone seems to feel that it's just because people insist on doing math when they could be listening to music they don't care about instead. Check out this section from the press release:
A couple of little details seem to undermine press release's credibility:
MusicStation's subscription value proposition is one that consumers have rejected time and time again. iTunes is about the break the 3 billion song mark, and that pretty conclusively says that consumers like to own, not rent music. And for those that want someone else to program their music, there's always a competing free service: FM radio. It will be interesting to see how MusicStation does, but my bet is that it's about to join URGE, Yahoo Music, Real, and the Zune marketplace in proving that consumers want easy and simply ways to enjoy music that they mostly have already paid for, not music that they rent.
Full disclosure: the author owns Apple stock at the time of writing.
Mobile phone makers are pre-loading phones with MusicStation software; it's estimated 100 million pre-loaded phones (pictured) will ship over the next year, compared to Apple's stated goal of 10 million. Many of the phones will be mid-price-range, in contrast to iPhone's $499 price tag. Users will be charged a flat fee of €2.99/week for unlimited access to MusicStation's one-million-plus collection of songs. Singles on sites like iTunes are typically sold for about €1.50, and the industry estimates the average user buys six singles a year. According to the company's press release, the first MusicStation handsets arrived in Swedish stores today.
A couple of little details seem to undermine press release's credibility:
- iTunes tracks cost €0.99, not €1.50. Go to, say, the French iTunes store, click on a track and check it out for yourself. If you want DRM-free tracks, they'll cost you €1.29, but if it's a subscription system, you are not getting DRM-free tracks; DRM is required to allow the vendor to revoke your rights to the music when you discontinue service.
- The €143.40/year fee is a whole lot more than the €5.93/year consumers pay to buy tracks. MusicStation's own data says that consumers buy six singles a year, yet MusicStation's €2.99/week amounts to a yearly fee of €143.40, or 26 times the average annual cost to buy the music. Economically, the MusicStation value proposition doesn't make sense, especially since consumers would no longer have access to their music if they stopped paying. And MusicStation is notably silent on the fact that most consumers already own a lot of digital music, which subscribers end up paying to play on their phone.
MusicStation's subscription value proposition is one that consumers have rejected time and time again. iTunes is about the break the 3 billion song mark, and that pretty conclusively says that consumers like to own, not rent music. And for those that want someone else to program their music, there's always a competing free service: FM radio. It will be interesting to see how MusicStation does, but my bet is that it's about to join URGE, Yahoo Music, Real, and the Zune marketplace in proving that consumers want easy and simply ways to enjoy music that they mostly have already paid for, not music that they rent.
Full disclosure: the author owns Apple stock at the time of writing.
Technorati Tags: iPhone, iTunes, Music, Music rental, MusicStation, Omniphone, Subscriptions
posted by Carl Howe at
9:24 AM
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