2.16.2011

Subscription Service + Smartphone = Music, Music, Music


Rolling Stone recently published an article showcasing several portable subscription services and detailing which is right for smartphone consumers.  While the revenue side of this service is still questionable (subscription services make up a miniscule percentage of the digital music market), there has been a solid development of streaming services and apps, big thanks to smartphones, Apple, and Google.  All services listed below are currently $9.99/month for unlimited access and have the ability to cache songs on your phone for offline pleasure.

MOG: In July, the Berkeley-based service initiated "All Access" smartphone apps giving listeners just that.  Now accessible on iPhone, Android, and Roku TV set-top boxes are more than 9M songs which allow unlimied high-bit-rate (320 kps) downloads.  There is reportedly excellent curation, which includes guest playlists from Thom Yorke and David Byrne from Radiohead and Talking Heads, respectively.  The downside: Searching can be headachy.

RDIO: This service, launced in August by the founders of Skype, integrates with social-networking tools (Facebook, Twitter), letting users connect with friends.  It also will sync up with your iPhone, Android, and BlackBerry and seemingly comes with and easy-to-use interface.  The downside: 7M songs (the least of any service) = lack of indie acts like Arcade Fire and Pavement.  However, with AF's recent Grammy surprise, this info may soon be just the opposite.

RHAPSODY: The long-running service launched a mobile app in late 2009, available with iPhone.  Android and Blackberry apps are coming.  Users will find a huge, 10M song catalog and Pandora-style personal radio stations.  The downside: Too complicated interface; low bit-rate downloads, which means harsh tunes.

THUMBPLAY: Hooking up with your iPhone, Android, or (best choice) BlackBerry, this app started as a BlackBerry native & allows importing of iTunes playlists into non-Apple phones - sweet!  Also has a polished interface.  The downside: Weakest music-discovery tools; little editorial content.

The puzzle of downloadable and streaming music seems to be coming together nicely.  As senior VP of digital music at Warner, Jack Isquith stated, "People ar elooking at the rapid adoption of the smartphone.  I think that has tilted more engergy toward the idea of looking at the streaming model again."  With a quarter of American cell phone users owning a smartphone, iPhone owners already demonstrating a willingness to pay for apps, and phones being viewed as hacker-resistant, easing record label anxiety about unauthorized file-sharing, this seems to be an ideal time for these services to come out in full force.  Interestingly, MOG CEO David Hyman says the record labels are done losing sleep about such hacking.  "Hacking into a mobile phone to get those files out is such a fringe thing...labels have evolved enough that we're past the point where they care about that."  Gartner Inc. analyst Mike McGuire says labels are backing the model and have even relaxed their requirements for upfront minimum guarantees they chage to get access to a catalog. 

While we Americans still await the the stateside availability of Spotify (Warner CEO Edgar Bronfman Jr., stated, "Free streaming services are clearly not net positive for the industry, and as far as WM is concerned will not be licensed), Apple and Google are zooming through streamland.  In December, Apple bought the streaming service Lala.  This will let users stream iTunes libraries through their iPhones, potentially blowing out all the services listed above.  With 160M users already in their database, as well as an obviously-needed 500k sq. ft. data center in NC, Apple is completely dominating this section of the industry...or maybe even the whole.  Google, on the other hand, previewed a version of the Android Marketplace in May, which allowed songs bought in the Marketplace to be automatically streamed to a device running the Android interface.  Buy it on your computer, play it on your phone.  In September, rumors spread that Google had pitched labels on a Google music product that would include a cloud-based "storage locker."

Sorry to the small fries, but I'm betting on Apple & Google here.

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