NETIMPERATIVE COMMENT: One small step for music

But to whom will these services appeal? Since much of AOL's marketing focuses on the family - about half of its 33m subscribers use its much-trumpeted 'parental controls' - it is a safe assumption to make that the MusicNet deal makes for a good fit, since its 250,000-song catalogue is made up largely from content provided by the major labels, and major labels sign populist acts; the 'middle ground'.

The average parent that buys into an internet access plan that allows web content to be filtered by an ISP might well be the kind of person who will buy into this kind of limited subscription service. By providing easy-to-use parental controls that remove the need for parents to be in any way technically-minded, it could be that many of these individuals are not the kind of people who spend hours cruising around file-swapping sites in search of free digital music - a process that typically involves installing file-swapping software and downloading files (which may be polluted with viruses and other nasty content).

Nothing too complicated in that of course, but AOL likes to put services on a plate for its users, and our guess is that its subscriber base is a demographic that by and large doesn't want to involve itself in piracy, or anything particularly technical for that matter. Thus, AOL may simply be servicing demand for digital music services for a decent percentage of its user base.

Furthermore, AOL may integrate MusicNet into a premium subscription service to make it even easier for customers to access digital music. The company told netimperative that bundling the service was "certainly an option" although admitted that there is no current timeline for introducing such a service. But, while AOL's involvement in legitimising digital music is to be applauded, many believe that MusicNet and its industry counterpart Pressplay fall woefully short of providing services that will encourage a much wider user base to sign up.

One of the key problems is still related to pricing. The record industry does not seem to have a handle on how much music fans are prepared to pay to access these legal services, and while they have the option of downloading files for free - via sites such as Kazaa and Morpheus - there remains little incentive for them to pay for incomplete services that by and large fall way short of providing a comprehensive inventory of songs. MusicNet charges $18-a-month to burn just ten songs onto a CD. $1.80 per tune?

Of course, the 250,000 primarily major-label owned songs will appeal to some and AOL's user base could be reasonably responsive in buying into MusicNet - but why would anybody pay $18 for the privilege of selecting ten tracks from a restrictive catalogue? That sort of money will buy you a CD (replete with packaging and an understanding from the consumer that manufacturing and distribution costs make up a fair proportion of the fee) so to go to the trouble of finding, downloading and burning songs, there should be some kind of price advantage, or, a more complete catalogue of songs from which to choose.

Until the record labels agree on a fairer price, the vast majority of people - and especially those that engage in piracy - will simply turn their noses up at these charges. What's more, companies like AOL will not receive any significant monetary benefits from introducing paid-for music services; the labels take about half of the subscription fees (licensing) while bandwidth and overheads claim a significant proportion of the rest.

AOL's decision to introduce a legal music download service to its user base will probably be something of a success, with a fair proportion of its user base converted into fee-paying MusicNet subscribers. But the broader challenge of providing digital music distribution services will remain exactly that - a challenge - until the record industry plays ball and understands what non-AOL customers are prepared to pay for.

27 February 2003:

26 February 2003:

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