Blog Post

@ EconMusic: Paying vs. Piracy: Finding Lost Revenue; ‘All You Can Eat’ Not Convincing?

Legal music services are going to have to give consumers a much better experience than the usual downloading a song for free, but what those services might look like is still in question. Still, the panelists in the Paying Vs. Piracy session at EconMusic are banking that enough consumers are willing to pay for something. Eric Johnson, president and COO of Wolfgang’s Vault, which sells archived concert footage, pointed out that on his site, at least, customers had demonstrated a willingness to pay for “unique proprietary content,” and that the site’s customers had even asked where they could buy concert footage that wasn’t available at Wolfgang’s Vault. Other highlights:

All you can eat: Marla Shapiro, the MCPS-PRS Alliance’s business development director for broadcast and online, said the difficulty with subscription models is finding a price point that works. In a single download scenario, the price of a song goes way down when many people buy it. But subscription models are much like gym memberships: if you go only once a year, that gym visit suddenly becomes very expensive. Or, if you only download one song, that artist gets a lot of money. Shapiro said she was still “skeptical,” of subscription models, and that they had taken a long time to take off: “I’m not convinced yet.” Thorsten Schliesche Napster (NSDQ: NAPS) Germany’s VP of sales and marketing, thinks the mix of a subscription model and single downloads could work, noting that a “significant part” of a la carte downloads comes from its subscriber base who are already paying at least 10 euros a month. He added that 98.7 percent of Napster’s songs are available through their subscription services, so it’s not an issue that the songs aren’t available.

Will the UK’s MoU with ISPs hurt new services? 7Digital CEO Ben Drury reports that the letter sent to illegal downloaders actually refers them to a number of legal services, such as 7Digital and iTunes, which he calls “free marketing” for the site. He dismissed the notion that if and when ISPs get into the game of creating their own legal music services that they would hurt services like 7Digital, by being able to bundle broadband with music. “I’m not overly concerned. ISPS creating content services–it’s a whole new kettle of fish.” Napster’s Schliesche sees ISPs getting in on music services as both an “opportunity and a threat.” He’s especially wary of ISPs subsidising prices: “We don