Subscriptions Are Go!

Today Napster goes live in Germany and in doing so sets the stage for what should be an eventful year for subscriptions in Europe. OD2’s original wave of services all focused on subscription (for a number of diverse reasons) but the European market were neither ready for subscriptions nor for the restrictive usage restrictions. Subscriptions are a hard sell. The majority of consumers are still reluctant to embrace the concept of essentially renting music. However to industry observers it is clear that they represent great value for money and utilize the Internet’s capabilities much more than a la carte: subscriptions are like a combination of walking into Virgin or HMV, reading NME, watching MTV, listening to music radio and having the advice of your friend who knows all the best new music. Whereas a la carte is essentially Amazon with a twist. However, the ‘renting’ concept requires a change in mindset, even with portable subscriptions.

Subscriptions have twin track road map: in the short term adoption will be driven largely by tech-literate early adopter music aficionados, often in their late 20’s to mid to late 30’s. In the mid to long term growth will come from younger consumers who have not grown up with the same concept of music as a commodity, who are familiar and comfortable with a much more transient understanding of music which file sharing has made appear essentially disposable but near limitless in choice.

Napster is clearly leading the pack in European subscriptions but they won’t have it all their way by any means next year: HMV and Virgin have recently launched subscription services, Yahoo will come to market in the first half of next year – probably first quarter, Real may well use some of its Microsoft money to bring Rhapsody to Europe, whereas there are various other services in trial and development stages throughout Europe. All of which means more choice for consumers, unless of course you are an iPod owner. Which sets the stage nicely for Apple to launch an iTunes Music Subscription service…