Two competing online music models

03.10.10 Posted in Blog by

Predictions and rumors are fun and exiting but often also a tricky business. One of the main lessons a new media student therefore quickly gets taught is to avoid sources with titles like ‘How xxx will change everything‘. But after reading different stories and rumors about Apple’s plans with the acquisition of Lala last December and more recently of Apple having talks with the big movie companies I couldn’t help thinking about the often rumored cloud-version of iTunes and what this could mean for the direction online music is heading. So here, completely off the record, an description of two competing streaming music business models.

Connecting the dots

When ‘connecting the dots’ of Apple’s moves the last months (the acquisition of online music service Lala and the talks with movie companies) and looking at the vectors in time that can be distinguished at this moment (increased mobility with connected devices such as smartphones and tablet PCs) it is very likely that Apple will get into streaming music soon as well. But using the now popular Spotify and MOG model doesn’t seem to be a logical step for Apple. This because it would likely rival their iTunes Store sales and thus also damage their relations with the major record companies. Looking at the service Lala previously provided to their users, the ‘all you can eat’ streaming music model Spotify uses is likely to be competing with the online locker model in the near future.

The online locker model

If Apple gets into streaming music the company would most likely develop a version of iTunes that let’s you put (a selection of) your music library online in a personal locker, accessible from everywhere when connected to the Internet with your iPhone or iPad. At this moment these mobile devices all have little storage space so having your whole music collection available online, without using all your precious gigabytes would likely sound attractive to the owners of such devices. Having exclusive access to a cloud version of iTunes on Apple devices will likely also increase the sales of their products and finally, using this model will probably not affect the sales of the iTunes Store since music still has to be purchased.

Already there are companies out there that provide such services, an example of this is MP3tunes that lets you store your music online and stream it to your mobile devices. With the back-up of the already known user interface of iTunes, the $1 billion data centre Apple has built and the possible standard presence of such a feature on every new device this model could definately compete with the online library model.

Challenging ownership

The most important part on which the online locker model could compete with the online library model is the sense of ownership. Users can now create playlists and build personal libraries in services like Spotify and MOG but when a user ends his subscription all of this is lost. While an online locker version could be subscription based too, users will still retain their sense of ownership since all music can, if necessary, be withdrawn from the locker. Tilting the notion of music as a product to a notion of music as a service has proven to be very hard in the last years with subscription-based services working hard not only to gain but also to keep users interested.  A possible future online locker model for streaming music therefore surely is a model to take in account when thinking about a possible ‘winning’ online streaming music model.

One Response to “Two competing online music models”

  1. […] has to offer at this moment? On demand catalogues versus online lockers As pointed out in an earlier post there is a distinction visible between two online streaming music models. The first one, the on […]

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