TrendWatch: Digital music companies that changed their spots
You should always stick to your guns, right? Well, not necessarily. Plenty of companies have rethought their business model or approach – and you can argue that this kind of flexibility is increasingly important, given the current economic climate. Here’s five music firms that changed something important – their business model, for example, or their user interface.
We7
UK-based We7 has always focused on ad-supported music, but the format changed pretty drastically in October last year. Originally, the company tacked audio ads onto music downloads. However, its new model is a more standard streaming music service with adverts in between the songs. They claim they’re not abandoning ad-supported downloads – it’s just that they thought the market wasn’t quite ready for them yet. Since then, We7 has focused on promoting its streaming service, revamping its site in the process.
Imeem
Another Music 2.0 service that’s adapted with the times is Imeem. Users had been able to upload as many songs as they liked to the service for no cost, but last month that changed. Imeem now charges $29.99 a year if you want to upload up to 1,000 songs and 100 videos, and $100 if you want a higher limit of 20,000 songs and 500 videos. A spokesperson explained: “We will continue to experiment with new monetisation opportunities if they add to the user experience.” Which is a nice way of saying ‘We need to make more money, and advertising sure ain’t providing it…”
Pandora
Pandora has always been an ad-supported online radio service, but those ads have been banner ads. That changed last month, when the company started serving audio adverts in its music streams. Pandora clearly feels a bit sensitive about the launch – on the company’s official Twitter feed, they said “So you know, we did not take on audio ads lightly. We try to be extremely respectful of your listening experience, & promise to be prudent”. The message showed the problem of this kind of move – a service like Spotify can launch with audio ads from the start and have no problems, but a service like Pandora, which hasn’t had them for its early years, faces consumer unrest when it does introduce them.
Lala
Lala started life as a free streaming music site, which planned to make its money through selling CDs to users, who’d be so excited about the digital music that they’d want to own the physical product. So much for that. In May last year, the company changed tack, with a new business model that involved charging users $0.10 for unlimited streams of a track, and then giving them the option to purchase it as a download (knocking the ten cents off the price if they’d already paid to stream it). Users could also synchronise their existing music library with the site for free streaming of those tracks.
Napster
Okay, so there’s one very obvious change that Napster has gone through – from illegal P2P tool to legal subscription service. But more recently, there’s also been a shift from being a client-based service accessed through a desktop PC application, to a web-based service accessible from any computer. US users got this option back in October 2007, but UK users had to wait until, ahem, this January to get it. With cloud-based music about to be all the rage, it’s a sensible direction to be going in.
Muxtape
The original Muxtape site was a playlisting tool that let people upload any music they wanted in virtual mixtapes for others to listen to. The RIAA stamped it out, so it came back as the same technology, but focused on artists using it to promote their own music. It’s a powerful example of the way even services that fall foul of the music industry can change their business models to try and work within it. Whether the new Muxtape is successful remains to be seen, of course.
February 12th, 2009 at 3:02 pm
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February 12th, 2009 at 9:03 pm
In my opinion Spotify is the only one of them having a future right now. They´re not competing download but offering the perfect solution for exploring and sharing new music (driving revenue to download shops very likely). And they understood to implement the freedom of choice throughout the entire businessmodell: Your Account can always vary between adfunded and subscription based. In other words: You configure your account via the account pages on the Spotify website exactly to your needs. It can change like your life changes. Even on a daily basis (day pass). That´s a big plus.
February 13th, 2009 at 4:53 am
I’ve read that many of the core developers who built imeem were at the original napster before it was shutdown. imeem went through a bigger change than you mention here, it was originally a p2p application, and only moved to a website based system after failing to attract any audience.
Now, look at spotify, it’s a p2p system with licensing restrictions, in many ways similar to what imeem was, so given that imeem decided to switch from a p2p model to a hosted model I could easily see spotify doing the same thing. The big advantage of the original napster p2p was the fact that the most obscure and rare stuff was available, but if the labels are telling spotify what you can share then this big win goes away and all you’re left with is the bandwidth savings.
September 16th, 2009 at 10:32 pm
Very nice , i aggree to previous posting, steph
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