While the panelists at our EconMusic conference admitted that they’re still struggling to make money from digital music, they agreed on at least one thing: the subscription-based model works. Chris Stephenson, GM of Global Marketing, Entertainment Business at Microsoft (NSDQ: MSFT), stressed the importance of getting consumers to stop focusing on owning music and instead converting them into renters — with the selling point for consumers being instant access to the music. Some of the other highlights from the “Digital Music: Forging Ahead With New Business Models” panel:
— Pricepoints: Michael Spiegelman, head of Yahoo (NSDQ: YHOO) Music, said that for the subscription approach to really take off, it needs to be bundled with mobile data plans. He also said that price isn’t as important as people might think, adding that people will pay a few extra dollars for a service if they like it. David Ring, EVP of eLabs, which is part of Universal Music Group, agreed on the bundling idea; he also acknowledged that people want to get everything for free, but suggested that consumers will pay for premium packages. Some of the panelists said they don’t see individual songs being a big moneymaker for them, because those prices are fast dropping. At what point, Ring wondered, is it worth it for record labels and artists to collect a small percentage of, say, a 45-cent tune?
— Artist-to-fan relationship: To Cory Ondrejka, SVP, Global Digital Strategy at EMI Music, the larger question is how the changing landscape of the music industry affects the artist. What happens when fans hear someone first on YouTube (NSDQ: GOOG) rather than the radio? This evolving artist-to-fan relationship becomes more complicated, but at the same time, with the varied layers of the internet, more complicated also means more niche-driven. The trick here? “We just have to be more clever.”
— Zune glitch: Asked about the glitch that stopped Microsoft’s 30 GB units cold, Stephenson laughed it off as “not a big deal,” blaming the issue more on a “slow news week” than on the device failing to compensate for 2008 being a leap year. He argued that it was only an issue for a “couple of people,” even though he also said it generated 2,200 customer calls. He joked, “with Microsoft, you pay the Microsoft tax on everything you do.”
The rest of our coverage is at our EconMusic channel