Streaming music subscriptions? Ad-supported apps? Pay-per-download track services? Expect digital music companies, labels and and indie developers to keep testing those payment options, with new tricks like pre-paid music cards and micro-payments thrown into the mix, too — because there’s just no one “killer” way to make money from mobile music.
For Shazam, it’s affiliate sales here in the U.S. — but a per-track discovery fee or subscription package in other countries. “The iPhone app is free here in the U.S., but it has eight million users, and we make a bit of money every time they buy a track,” said CEO Andrew Fisher (pictured right). “When we first started, we charged up to a dollar every time someone discovered a new track — we don’t have to do that here, now, but it still works in other countries. There’s also a subscription available through AT&*T* — and for three to four dollars per month, you only need a little market penetration to generate real revenues.”
For Rhapsody, it’s the subscriptions. “We sell tracks, we give some away for free, but our subscription business is the largest by far,” said Neil Smith, Rhapsody’s VP of business management. “We’ve got about three-quarters of a million users on it now; once we get a bigger mass, we can maybe even afford to lower the price.”
For *Clear Channel*, it’s all about ads, including custom branded digital radio stations. “We created Red Star Radio for Macy’s; it targeted 18-24 year olds with special music and other content,” said Paul Miraldi, the company’s SVP of digital programming and marketing (pictured center). The companies timed the station’s launch to coincide with on- and offline back-to-school campaigns.