Ted Cohen: “Subscription Is Going To Win Over A La Carte Pricing”

Authored by Jay Baage on October 3, 2007 - 11:14am.

Digital Music Forum West 2007 - There is no denying that the business of selling music in form of CDs is failing. However, there should be other ways to make money off music, right? Ways that are compatible with how music is experienced in a digital era. So what are they?

At our recent Millennials NYC Conference, Dan Porter, VP of Corporate Development at Virgin USA, said that the only people buying music from iTunes are 35-45 year olds from Silicon Valley and there are not enough of them to make the music industry prosper again. When DMFW kicked off in Hollywood on Wednesday, the music music industry is gathered to share the latest developments about what is going on, besides iTunes, in the digital music space.
“Subscription is going to win over a la carte purchasing”, said Ted Cohen, Managing Director, TAG Strategic in his introductory remarks.
“The best defense against piracy is great label (approved) music services”, he continued.

As a sign of the uncertainty that still exists in the digital music market, the first panel called “The State of the Digital Union” immediately got into a discussion about Cohen’s statement. Most of the panelists agreed that there is no single model for monetizing music that will prevail.
“The civil war is over”, said David Pakman, CEO eMusic.
“Subscription service is not THE answer, it is ONE answer. There are many.”
Ian Rogers, VP & GM, Yahoo Music put in a word for the new Amazon DRM-free music store:
“You should take a look at it. It is F…ing awesome.”

My Take: If virtual world companies can make millions of dollars from selling virtual goods and services, it is not be unrealistic to assume that people should be willing to pay for music, if the proposition is appealing enough. If the industry is not making money, then the proposition is not appealing enough. Think about it. I agree with Ted Cohen that the best defense against piracy is not litigation, it's great music services (but not necessarily subscription alone).

Joakim Baage

Published in DMW Daily, October 3, 2007

Previous story: Fan-Generated Sports Content Site Sportingo Gets $3.2 Million
Next story: It’s Official – Microsoft Launches New Zune Music Players For The Holiday Season

Email this page

Comments

Subscription Services

Submitted by Marc Cohen (not verified) on October 3, 2007 - 2:11pm.

Subscription services will account for a very small portion of recorded music revenue. They are simply to expensive for the mass market.

Subscriptions

Submitted by phoneranger (not verified) on October 4, 2007 - 1:50am.

It's tough to imagine how a subscription model can get enough traction in the mass market. There is too much inertia. There are too many "free" alternatives. And to capture a critical mass of non-digital consumers, you'd need a massive education/marketing campaign. Sadly I think the labels' proposal to fold music into the basic cable bill would have a better chance.

Subscriptions?

Submitted by anonymous (not verified) on October 5, 2007 - 7:19am.

Keep on believing what's best for your business model is what your customers want. That will keep you on the same level as the typewriter sellers today.

I believe they should adopt

Submitted by anonymous (not verified) on October 7, 2007 - 6:18pm.

I believe they should adopt the allofmp3 model. By charging a more resonable price per download you will find it more appealing. After using allof mp3 I found myself spending hundreds of dollars on music downsloads because it was cheap and convenient.