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News
Which Business Model Will Dominate Digital Music Sales?
Monday, August 28th, 2006 at 3:00 PM - by Brad Cook
"The questions about business models in the digital age have not yet been answered," Jill Rosengard, managing director at research firm Frank N Magid Associates, told Financial Times on Tuesday, in response to questions about Universal's support for the ad-based music venture SpiralFrog.
Ms. Rosengard added: "Of the three possible business models - pay-per-play, subscriptions or advertising-supported - so far pay-per-play is the only one that has really worked for music. Subscription models on the internet work but only for very specific and very valuable content."
Despite iTunes' dominance of the digital music sales business, noted reporter Aline van Duyn, "it is estimated by music industry bodies that for every legally downloaded tune, people are still illegally copying 40 others." Forrester Research analyst Ted Schadler said: "It is possible that different models will work for different people. Downloads might be best for younger people who define themselves by their music. Subscriptions might work best for older people who love music but are more comfortable not owning it."
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