Views from Phanfare CEO and Co-founder Andrew Erlichson

Link Selling Music in the World of Free

Although Apple is having good success selling music online, there has long been serious concern within the industry that with DRM disappearing the business of selling music is going the way of the dodo bird as online sales are not keeping up with the declining physical sales. Fred Wilson eagerly awaits the day when all music is free via advertiser-supported streams.

DRM is going away. That is clear enough. So where does that leave the music industry? I believe there is an opportunity to provide a service that people will pay for to buy songs. Rather than buying a song and simply getting a single copy, buying a song should make it available to you for perpetuity from any network-connected device you want at higher and higher resolution as time goes on.

Apple is in the best position to provide a service like this. Here is how it would work. You would buy a song on iTunes from Apple while logged in using your Apple ID. Apple would sync that song without DRM into iTunes. You can do what you want with it. But Apple would also make it so that you can login from any iPod and get to your full purchased library.

Essentially, the songs you “own” would be part of a hosted library that you could access from any device. When you enter a car, you could login to the car audio system and get access to your full library (it would be cached on the hard drive in your car stereo). When at a friend’s house, you could login at their computer (or stereo) to iTunes with your credentials and get access to your songs. Through smart synching and caching, it would appear that your music is available everywhere you want it.

This is a type of service I want to buy a song from. It sells the convenience of a hosted environment. Whether the songs are DRMed or not does not matter (they likely won’t be). Because even if I export a song and give it to a friend, he has only 10% of the experience unless he is also an “owner” of record with Apple.

What is required to fulfill this vision:

  • The provider has to be strong enough to get the licensing deals that would allow this type of sale of music to consumers.
  • The provider has to be able to get the service and synching incorporated in the iPod, the default music player for most people.
  • The provider needs to able to get the service incorporated in other consumer electronic devices like car stereos and home audio systems, to allow true universal access.
  • Consumers need to believe that the provider behind the sale is not going away.

Few companies satisfy all these criteria. Apple is one of them. Amazon gets pretty close.

By layering service on top of the music, piracy becomes a non-issue. You might be able to copy the music from a friend, but you can’t steal the service. Of course, there might be some sharing of login credentials, but this is much more easily addressed by monitoring simultaneous usage.

This type of music service would finally make owned music a hosted experience like most other consumer apps, while still providing commercial free music, which many people want. It simultaneously solves the music backup problem as well. I don’t need to backup my music because any iPod I own will automatically have my music, synched wirelessly over the network (we can all dream). And I won’t need a computer to enjoy an iPod, which is welcome because computers are a disaster (we need a good consumer appliance).
Because this service would guarantee that music would be provided at higher quality as time goes on, I might even buy the songs that I already own free and clear from old CDs.

How about the pricing? Could you provide a song for $0.99 and offer to restore it for the person indefinitely into the future? I think you probably could. After all, the music is not streamed, just synched, and you do have the attention of the consumer and can probably sell some advertising at appropriate points in the process (for example, when waiting for your device to synchronize or in the music store).

Would everyone buy songs this way? I think ad-supported music might be bigger, but there is a market out there for a premium version. Like buying a CD versus listening to the radio, this service would provide a better experience for the music you really care about.

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