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March 28, 2008

Teaching an Elephant to Dance [9:53 am]

Music companies take a new look at subscriptions (pdf)

After resisting subscription services out of fear they would weaken CD sales, music companies are considering the idea in an attempt to reverse plummeting sales and unabated illegal downloading of music from the Internet.

[...] Music executives say discussions are in the early stages and face several hurdles. Some consumers prefer to own music. Others might balk at yet another charge on their monthly Internet bill.

“If a music surcharge is mandatory, consumers are going to resist,” said Russ Crupnick, senior analyst for NPD Entertainment, a market research firm.

Warner hired former Geffen Music executive Jim Griffin as a consultant several months ago to help plot the label’s digital future. Griffin could not be reached for comment.

But he told Portfolio.com that “today, it has become purely voluntary to pay for music. . . . If I tell you to go listen to this band, you could pay, or you might not. It’s pretty much up to you. So the music business has become a big tip jar.”

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