cNet: Why Subscriptions Are Popular In Music Biz Circles

David Ring

For anybody wondering why MICROSOFT and the top music labels continue to promote subscription music services, the answer was revealed THURSDAY. CNET.COM reports that UNIVERSAL EVP/Business Development & Affairs -- eLabs DAVID RING says download sales by themselves won't solve music industry's woes. "If what we're trying to do is one-by-one downloads ... that's not a business that can grow," RING told ECONMUSIC conference attendees during panel discussion he participated in. "It won't be healthy for the industry."

Prior to RING's statement, CHRIS STEPHENSON, an executive in MICROSOFT's entertainment unit, was ballyhooing the progress made in ZUNE's subscription service. ZUNE is the digital music player that MICROSOFT launched in NOVEMBER 2006 to compete with APPLE's IPOD.

RING made clear subscription services are not the only business model UNIVERSAL MUSIC is exploring. UNIVERSAL execs will continue testing strategies until they find one, or a combination, that work.

What strategies show promise? Panel members discussed some well-worn ideas, such as bundling music fees into people's Internet-access bills. One idea tossed around was packaging music into NETFLIX or a similar service. RING said subscriptions work and cited NETFLIX and cable TV as examples.

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