A La Carte Vs Subscription

November 7th, 2008       | Digg | Sphinn | Del.icio.us | StumbleUpon |    1 Comment »

Today’s debate on A La Carte versus Subscription digital models is intensifying, driven primarily by new unlimited download offerings from the mobile telcos. In time they will presumably be joined by the ISPs. The force is seemingly with these utility service providers whose single download services have thus far failed to achieve mass market traction. So what consumer evidence is there that supports the case for unlimited music supply?

 

PopScores is a useful source of information to help inform the argument. For starters there are the Love scores. We know that Love is the ultimate driver of sales. For every 10 people who Love an artist, 7 will definitely consider purchasing new music by that artist. We also know from PopScores that people only love a few artists at a time; on average a little over 4 artists at once. This does vary with age & gender but not so much as to matter. Women on average love 5 artists at any one time while men love 4. Males in their teens love 3 artists whilst males 20-29 love 5 artists. Females love 6 artists when they are teenagers and progressively fewer as they age.

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Radio tells a similar story. When the first jukeboxes were installed in clubs and bars in the US, a station owner noticed that despite the large choice of songs, patrons tended to choose the same songs. That was the birth of Top 40 radio. However, 40 songs were still far too many for radio listeners and CHR was born out of necessity to play fewer songs more often. The same Love principle applies today. There aren’t enough songs around that are loved at the same time by the same people. The implication sounds very unappealing but this truth clears up many of the mysteries around music sales.

 

So, choice is certainly no winning argument for subscription services. The “millions of songs” available mantra will be meaningless to consumers if they feel they have to pay for the right to access them all.

 

Furthermore, there is always the risk of overestimating familiarity. The vast majority of the millions of songs potentially available are unfamiliar to the target consumer who is generally aware of hundreds of songs rather than thousands. Why would millions matter to them? Even an advertising-supported model may struggle to attract enough consumers to build a mass-market presence. Music is unlike TV where subscription and advertising work. MTV knew a long time ago that people wouldn’t pay an additional fee to subscribe to their Music TV offering and so it was offered free as part of a package. TV stimulates us differently from music. We spend much of our lives watching TV as a primary activity while music is often a secondary or background activity. Radio still works as an advertising-supported model but the most successful stations have small playlists and drive ratings with celebrity-based entertainment and local, relevant non music content.

 

PopScores shows us that people are willing to pay for music if they love it. Music doesn’t have to rely on being supported by advertising or to be thrown into a pool of millions of songs that one might eventually stream. What music relies on is Love. The love a consumer has for an artist and/or song which is seemingly at odds with a volume for volume sake proposition.

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