CEO of MOG said at the end of this video that the "holy grail" of music subscription is getting service like Mog, Spotify, Rdio, Rhapsody bundled with either internet cable or phone carriers.
And he stated that the music labels are wiling to go as low as $2-3 per month per subscribers.
Let's assume it's $3 a month. 300 million cell phone users in the USA
$3 x 12 months x 300 million subscribers = $10.8 billion in revenue.
USA recorded music for 2010 was something like $7.3 billion (retail value).
Which mean an increase of $3.5 billion for the music industry. Any revenue they get from Itunes/Amazon or from CD purchase is just icing on the cake.
Assuming you're paying $70 a month for your phone contract (most Americans pay more than this each month). What's another $3 in exchange for unlimited music downloads?
Unlimited talk, text, web. Why not unlimited music downloads too?
It's already happening. But only with a small regional carrier (about 5 million users). Compare to the Big 4, 5 million users is tiny.
Verizon: 107.7 mil subscribers
AT&T: 100.7 mil subscribers
Sprint: 53.3 mil subscribers
T-Mobile: 33.6 mil subscribers
Muve Music has over 270,000 subscribers since it launched back in February. It's a HUGE success for Cricket Wireless and for the music industry who has been lobbying for something like this for years. Hopefully, the big carriers will take notice and duplicate it. $3 extra each month in exchange for unlimited music downloads.
Muve Music $55 a month for unlimited talk, text, web and MUSIC. Here's 2 TV ads that Cricket did for Muve Music. Worth a look because I sincerely believe this will be the future of music consumption. Paying $3 extra on your phone bill to get unlimited music downloads.
A lot of people are paying $20 a month for unlimited TEXT. $3 for Unlimited Music is a STEAL in my opinion.
Artists will get paid depending on their contract with their labels. Right now, I believe they get about on average 15% from music sales.
With this new model, their cut will be the same (depending on their star power).
EXCEPT they will be paid MORE because the pie has increased from $7.324 billion to $10.8 billion.
Trust me, artists would LOVE this. Overnight, the music industry would grow from $7.324 billion to $10.8 billion. That's about 50% better.
overall i think it would benefit the record labels more than the artists themselves but any increase in revenue for the music industry is probably a postive thing.
i just dont know how many people would sign up for the service. especially older adults who dont download music on a regular basis.
personally i would love it since i spent 50 dollars alone this month on music.
overall i think it would benefit the record labels more than the artists themselves but any increase in revenue for the music industry is probably a postive thing.
It goes hand in hand in my opinion.
If the record labels make more money, the artists will make more money. That's how it works in the music business.
Adele selling 5 million albums is good for her label but it is also good for her since she get about 15% of that total revenue.
Quote:
i just dont know how many people would sign up for the service. especially older adults who dont download music on a regular basis.
They are automatically sign up when they get a cell phone. Whether they use it or not.
It's BUNDLED into your cell phone bill.
MOG CEO gave the example of a subscriber of Comcast Cable TV. That subscriber pays $3 for ESPN whether he/she watch ESPN or not. Not everyone love sports but everyone love music.
Older people will be able to download music on their phone. It's so EASY to use Muve Music.
1) Search by typing the song name
2) Click download on that song.
3) Play
Here's how easy it is with Muve Music. Someone demonstrate how to use Muve Music:
From 1:10 to 1:40 (the girl played Black and Yellow with just a touch).
If you're asking about how money would be distributed...this is easy.
For example, each song listened to on average will generate $0.001
If all your songs are listened to 300 million times for that month. You get 300 million x $0.001 = $300,000 each month
Services like Spotify and VEVO know EXACTLY how many times a song is listened to each day, each week and each month. And they paid the rights owner accordingly. It's easy to track sales with the internet and the right computer codes.
For example, this indie band got paid as followed from Spotify. Check out the QTY column.
you estimations are based on everyone in the united states (300 mil) subscribing for that when in reality it will probably never reach 100 mil and that will result in a loss of overall revenues
you estimations are based on everyone in the united states (300 mil) subscribing for that when in reality it will probably never reach 100 mil and that will result in a loss of overall revenues
This is how many subscribers the big 4 carriers has;
MetroPCS had 9.1 million wireless subscribers at the end of June, compared with 33.6 million subscribers for T-Mobile. Verizon Wireless, AT&T and Sprint had 107.7 million, 100.7 million and 53.3 million, respectively, at the end of September.
295.3 million subscribers
All they have to do is bundled unlimited music downloads to their service (talk, text, data) for $3 extra each month. Basically, if you want a cell phone service with a big carrier, you will be forced to sign up for $3 a month unlimited music downloads (whether you use it or not). For example, some people have unlimited text but never use it.
Most Americans are with one of the Big 4 Carriers. And in total, they have 295 million users. Out of the current population of 310 million +
which make it the second biggest music subscription in the USA behind Rhapsody. Spotify is third with around 200,000 paying subscribers.
The big shift will come when one of the big 4 carriers follow suit and copy Cricket Wireless's Muve Music. The biggest reason why this is a good idea for the carrier is that it reduces "churn" (people leaving the carrier for another carrier).
When 1 of the big carrier do this, the other 3 will follow suit or see some of their subscribers defect.
The technology is ready for it (smartphone and Spotify). It's just a matter of time. We are a few years from a world without Itunes and physical CDs. For those that has Muve Music, Spotify Premium or Rhapsody, it has already arrived.
Just between AT&T and Verizon, they have more than 200 million subscribers combined. Imagine if these 2 big carriers charge $3 per subscribers for unlimited music downloads.
They could split it like this:
Total revenue: $3 x 200 mil subscribers x 12 months = $7.2 billion.
Music industry get 2/3 = $4.8 billion (this is more than the $4.2 billion the music industry got right now)>>>instant profit of $0.6 billion
Wireless Carriers get 1/3 = $2.4 billion
The million dollar question is this: People are paying $60 + per month for a phone service, are they willing to pay $3 extra each month to get unlimited music downloads.
For his segment, Jeff Toig, SVP of Muve Music, presented a unique case study on his company. Muve, through wireless provider Cricket, gives users access to millions of songs and unlimited music downloads directly from their mobile phones.
"We set out to solve a problem that no one was innovating for," said Toig "How do we include music in a wireless plan for free?"
Muve Music presently serves one-third of the mobile music footprint, and has bundled its service into Cricket's wireless plan. In order to effectively make a stamp in the music tech space, Toig feels companies must innovate in two areas - in their technology as well as in their business model.
"As part of our business model innovation, our users feel like they're getting their music for free, when they're actually paying for it as part of their wireless bill," Toig said. "As part of our technical innovation, we've built a unique music experience customary for the phone. The wireless network is our delivery method."
Toig went on to explain that Muve's target market segment differs from the target market of iTunes - which is where most companies seem to be setting their sights.
"Our segment of the market is cash-based, and not typically using services like iTunes, Amazon, Rhapsody or Spotify," Toig comments. "Our users spend two to three hours a day listening to music and download 400 songs a month. We hold a customer-satisfaction rate of 95 percent."
He further suggests that there are millions of people in the United States, and billions more around the world, who don't necessarily fit the same mold as iTunes users, so companies are wise to reach for different market segments.
"It's a unique time to partner with the music industry," Toig said. "In order to be successful, one must bring a solution that creates an incredible platform for collaboration."