Datz Music Lounge hit the newswires today. There’s plenty of skepticism about it but I’d advise not to get too hung up on the caveats (i.e. that it only has a couple of the majors, won’t include many new releases and requires a 100 quid up front payment). This is as big a deal as Nokia’s Comes With Music and MySpace Music. Why? Because it changes the rules of engagement for digital music subscriptions. This is the first unlimited DRM-free music subscription service. Sure, it requires a hefty up front fee but they need to protect against misuse. Also, more new release catalogue will get on there over time. The major labels are, understandably, approaching this with some caution and are trying to do their best to minimize cannibalization of CD sales and Napster and Rhapsody.
There’s a decent argument that both those battles are lost. OK, CDs will be with us for a while yet, but Napster and Rhapsody simply don’t have a future in their current guises alongside CWM and Datz. They need to change their game plans, and quick.
And, of course, the rumour mill has it that Apple are edging towards a launching a subscription service of some kind. What does this mean for them? Given their current relationships with the record labels it’s pretty safe to assume that they didn’t have any inside information from the labels on the Datz licensing terms or business model. So they may well find themselves in the far form ideal position of being in advanced stages of developing a service which will not stand up against Datz on paper. But don’t get too worried for Apple, their far superior marketing skills (and budgets), coupled with their market leading product development and the ace of hardware integration will see them good.
All in all, though, Datz just turned the page on the next chapter of music subscriptions. A chapter that could be so significant as to make the market up to this stage look like little more than a preface.
Music Industry Blog 