We all know that in the past people used physical music mediums.
We had the old pickup records
then 8-track…. which didn’t allow you to go back… but it allowed a more portable music medium
then we had the cassette tapes… which for all intensive purposes were good…
and then CDs.
CDs are the FIRST generation of music and sound coming through a digital format. CDs are just .wav files on a disc.
MP3s came out…. which were compressed music files. Basically a .wav… compressed. instead of 50 MB for one song… it would be 3 MB….
So why can’t CDs be that way? they can. you just need software to read the MP3 and decode it.
So now we are getting into the option of downloading music. during the 90s… people would use P2P sharing services such as illegal Napster, kazaa, or bittorrent… to download mp3 files illegally.
Then around 2001, various governments forced these to shut down, and started persecuting people who download illegally. Up to $50,000 charges! I knew one guy in my college who got hit with $10,000 penalty fee.
What did the music industry learn about P2P networks while they were suing and raping civilians with lawsuits? People like music NOW… instantly. not to wait and wait and go buy a CD in a store. people use MP3 players, and want music on the go portable, without fear of scratching the disc or losing the song….
Thus they came up with paying services online, that you can buy songs and download them. Itunes is the best example… you can buy a song for about $1 and keep it for as long as you have your Ipod, computer, or the account open. If you lose the account, put the song on 5 computers or more… then you can no longer access the song (there are ways around this). in general that’s not a big deal….
However, in the world of business today… the key words to live by are sustainable revenue. I can make more money by making someone pay me $1 a month for 1 year… than if i take $12 today. Because of inflation and other costs… that $12 has LESS value in 1 year… than if i guaranteed myself a $1 in December. it allows a better growth model, and when times are hard… you can show your investors you stiill have revenue. your growth no longer spikes up and down… its stable and can be calculated… all this is good for stockholders and lets you put off a more stable image.
So… enter the subscription plan. You don’t buy the song. you rent it. for as long as your paying my service. I charge you $15 a month… and you can download… i dont’ know… say 100 songs a month… up to you what they are. the difference is…. if you EVER cancel… you lose all the songs. they won’t play. you can’t download them…. you can’t play them or copy them on anything… they are just dead files on your computer. like a virus. sucks right? well you agree to it when you sign up. why would you do it? do the math. $15 for 100 songs. its $0.15 a song a month. how many times you listen to it? probably a lot for about a week. but then you get more music… more songs… etc. Most people don’t go back every day and listen to the same song…. they want new music. so per month it makes sense. per year? well it costs more. In the long run… the company makes MORE money, and you spend more… and now you are LOCKED into using their service.
why would anyone sign up for this? Well… the song selection. Go onto iTUNES… and look up Ayumi Hamasaki… or Boa… or Faye Wong…. you won’t find many. Go to Rhapsody, napster, or Windows Marketplace. You’ll find a LOT more… many songs you would never find anywhere else. Also, the song quality is better…and it allows the company to provide better service and support.
Why in the world should you care? because the market wants to go this way. everything is going towards subscriptions. tv, car sharing, dvd rental (netflix)…. video game downloading… software (new office and windows systems might run on a subscription in stead of a 1 time payment…. if you stop paying you lose support… allows company to track information)….
So… be very wary of the future….