As music services Mog and Rdio take up defensive positions by launching new free-to-listen services, it may look like streaming is the future. But retailers like eMusic are fighting back by arguing that purchasing songs remains as relevant as ever.
More accurately, both services — which previously required all users to subscribe — are adding a lower tier of free access to entice more users in. Mog pulled the trigger first, announcing a new “Freeplay” scheme (launching today) that will let users listen to a limited number of tracks for nothing and earn more plays if they are active sharers. Rdio, meanwhile, says it will launch a similar service in the next month. And unlike Spotify, it looks like both will not support their free activities by running advertising.
No ads? Isn’t that just a kamikaze business model? We know that the cost of streaming can often be prohibitive — but both companies must be hoping that they can get enough users to upgrade to subscriptions to offset the losses they’ll rack up on ad-free listening.
I suppose, faced with such strong competition, there aren’t that many other ways to compete. I mean obviously, both companies have teams of engineers working on a system that can stream free music directly to your mind — but until then, it looks like free is the way in.
Or is it?
The free streaming frenzy coincides with news from download retailer eMusic, which is pushing the results of a survey it commissioned into online behavior. Given the source, you will probably need to take the result with more than a pinch of salt, but essentially it backed up a novel idea… that instead of giving music away for nothing, you could try selling it.
The rise of streaming has led some to argue that it will eventually kill retail (such as the author of this piece in the Harvard Business Review which says that “over time this model [streaming] will displace iTunes”) and no doubt such claims will receive a boost from the increase in free services.
But eMusic says it is not so simple. The survey, which was conducted by Insight Research and came from interviews with 1,000 adult music consumers across the U.S., found that only a small number of customers saw streaming and ownership as diametrically opposed.
According to the study, 91 percent of people still “prefer to own music”, listing a number of reasons such as unlimited listening, security that their music won’t disappear, and support for artists. And while only 13 percent of people surveyed pay to stream music online, the majority of those (84 percent) still buy music as well.
These tendencies become even stronger among those who count themselves as “independent” music fans, many of whom use streaming services like Spotify, Mog and Rdio as ways to try new music before they purchase.
It’s always worth being skeptical of surveys, but noises like this have got to sound good to the likes of iTunes and Amazon — and while it may not be enough to those who think streaming will emerge as the only true victor, it indicates that there’s life in retail yet.
Busker photo used under Creative Commons license, courtesy of Flickr user Johnny_boy_a