The answer’s easy: it doesn’t work for music. Unless you were living under a rock on Friday, you probably read Techcrunch’s post, “The Sorry State of Music Startups.” Without going into great detail, Arrington’s completely right, and for once, he doesn’t resort to the whole “music just wants to be free” argument so common among Web 2.0 types. Instead, he writes that “free streaming music” is about as sensible as trying to douse a burning pile of money with a gallon of gasoline.
Bruce’s post “Why Are We Still Debating Free?” infuriated me. Sure, Chris Anderson’s notion of “freemium” sounds great for any website looking to get users to come back often to consume content, but look at the body count piling up in Music 2.0 and tell me how that looks. It’s not truly “freemium” because they don’t own the good in question to begin with. Andrew Dubber incorrectly states that “Yes, Google gives their consumer-facing stuff away, and they are a massively successful company.” Google owns search on the web. They’re not giving that away. They have a near monopoly on the most potent revenue stream on the web!
Those of us who work very hard on the editorial side, especially on the web, know just how difficult it is to get people excited about music these days. There are times you can’t give the stuff away! For all the talk about bands as brands and what-not, I can say honestly that music may have never been a smaller part of the overall entertainment picture than it is today. Sure, music may be ubiquitous in commercials, on our iPods, and wherever else it lives, but that doesn’t mean people are actively seeking it out in any meaningful way.
The music business has changed and so have music consumers. Now that music can be had for next to nothing, consumers are willing to accept whatever low-quality product is available online and see no incentive to upgrade. The same is true in any other business that’s been affected by the Internet. It pains me to say it, but there may be no future whatsoever for music as a business in its own right. The only thing these businesses can really sell are t‑shirts! How can a strategy around “freemium” work when consumers are already acquiring the good for free or nearly free?