Saturday, February 13, 2010

Free.99 vs. $9.99

A blog entry I read by Mark Mulligan (Forrester Research analysts) states that the debate between free on-demand music and subscription based music continues to rage on. He mentions how Edgar Bronfman Jr. (CEO of Warner Music Group) stated that WMG will no longer license their music to free streaming services due to their lack to generate significant revenue.

Mr. Mulligan takes this issue of free music and shades some new light on how to make it work in today’s age. The point that Mr. Mulligan makes is that these services are serving as major tools in helping build the new paradigm of music monetization. He also argues that consumers just don’t want to pay for digital music on a month to month basis when they have the option to legally stream it for free. The idea he suggests is a three-tier hierarchy that integrates the premium, subsidized, and ad supported methods of music monetization together. Mr. Mulligan believes with this system free on-demand music can work, and satisfy both sides of the debate.

I am a supporter of free streaming music because it has proven to help lesser known acts gain new fans. Also, from a marketing perspective this try before you buy method is a good tactic because it gives consumers more options to obtain music legally. Therefore, I feel free streaming services should be given more time to prove themselves as a lucrative source of revenue. Because the free model is showing us a lot about the demands, needs, and wants of consumers.

Submitted by: Jarvis R. Smith


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