Tiscali, not so long ago reviled by many music industry execs for working with Kazaa, are now the proud owners of one of Europe’s slickest legitimate online music services.
Powered by OD2, the service offers just about everything a legitimate service should offer, and more, but without appearing cluttered. Added to that, much of the end-user cost is hidden within the cost of the ISP subscription, providing a perfect way to ease sceptical online music fans into the legitimate fold. But there is still room for improvement: the service only offers a limited amount of CD burning, and as our research shows, the ability to burn on to CD is the key motivator for consumers planning to pay for music online. Of course, given the opportunity both OD2 and Tiscali would allow much more CD burning, but given the nature of the licenses granted by the labels this is pretty much all they can offer.
You can understand the labels reluctance to allow consumers to buy and burn online at a lower cost than they can offline – there is very real threat of hugely cannibalistic revenues. But sooner or later they are going to have to take the plunge. The labels may be hurting from declining sales now, but that will be nothing compared to a few years time if they don’t start getting today’s teenage file sharers into the legitimate fold. And the only way they are going to achieve that is by loosening up with their digital licenses.