Record Labels Planning Subscription Music Service?

Posted: 14 Oct 2007 10:02 AM CDT

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.

Source: Ed Oswald, BetaNews