Sunday, October 14, 2007

Record Labels Planning Subscription Music Service?

All of Universal's jockeying with iTunes may make sense now: the label may be planning a subscription music service of its own with other big record companies. But will the labels' own service be used simply to retain a stranglehold on the market rather than giving consumers more choice?

Universal has its own catalog, and is apparently taking to Warner Music Group about putting that label's music on the service. It has reportedly already signed up Sony BMG. Business Week reported Friday that the move is aimed at taking more control over the distribution of digital music, which Apple has a near stranglehold on.

Together, the three labels would control about 3 out of every 4 music tracks sold in the US. Universal Music's chief Doug Morris also has hope that the service, dubbed "Total Music," would lift up competitors to the iPod, such as Microsoft's Zune.

If the rumors are correct, users would shell out money only for the Total Music player itself. The roughly $5 per month fee to download music would be absorbed by hardware makers and cellular carriers. However, it is not clear how that would affect the price of the player itself.

Such a setup would be drastically different from what is currently available, which has some industry watchers questioning the speculation. iTunes users not only shell out anywhere from $79 to $249 -- or even more -- for the player, but 99 cents for each track that they download over that.

Insiders figure that the cost per player would run around $90 for the subscription service, figuring that most digital music player owners keep their devices for about 18 months. It is quite possible that the Total Music players could be quite a bit more expensive initially to recoup some of that cost. Such a strategy might hinder sales, especially since customers would essentially lose their music collections if they lose their player, or if it breaks.

By Ed Oswald, BetaNews

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