Music Subscription Services Really The Future?

Some people, like Columbia co-chairman Rick Rubin (article), are claiming that music subscription services are the future of the music industry. According to the FMQB article, “Rubin predicts this model will be necessary for the industry to survive. ‘Either all the record companies will get together or the industry will fall apart and someone like Microsoft will come in and buy one of the companies at wholesale and do what needs to be done.'” But there are a few others, like Rubin’s co-chair at Columbia, Steve Barnett, says, “Smart people have told me if the subscription model is not done correctly it will be the final nail in our coffin. I’ve heard both sides of the argument, and I’m not convinced it’s the solution to our problems,” and I agree with him.

I think that unless the music industry completely adopts DRM-free music, subscribers will be tied to the Windows operating system and millions of iPod users and other computer users will be hung out to dry. Major subscription services like Napster and Rhapsody provide content that is encoded using Microsoft’s DRM (WMA codec), which requires Microsoft’s Windows Media Player, versions 10 and 11 for download and personal use, which are only compatible with Windows computers. This is great for Microsoft, but not the rest of the world. The last version of the software that was made available for the Mac was Media Player version 9, and “Microsoft will continue to offer Windows Media Player for Mac as a download free of charge, but has no plans to provide future updates or product support.” And there was never a version available for Linux!

Microsoft’s PlaysForSure website lists over 150 media players that are compatible with their codec. But having already adopted the Microsoft DRM prevents millions of Apple and Linux computer users, and iPod owners from getting and playing the music. Apple and Linux represent a small number of desktops compared to Windows desktops, and the numbers are growing. According to Macworld, at the end of 2004 Apple had 2.88% market share, and now, according to Information Week, Apple is tied as the number 3 computer maker with a 5.6% market share. As of April 2007, over 100 million iPods were sold that also can’t play files encoded with the Microsoft DRM. According to an NPD Group study, Apple has almost 73% of the portable music player market share with the iPod. That puts the remaining 27% of Microsoft DRM compatible PMPs in the minority. And that’ s a lot of users to ignore to satisfy a minority group.

The one thing that all operating systems and portable music players have in common is that they all can play MP3 files and unprotected AAC files; both of which are DRM-free. They are cross platform. Anyone using any kind of computer or music player can use the files. This excludes no one, inviting everyone to participate; the vast population of iPod users, the growing population of Apple and Linux users, huge population of Windows users, and all the PMPs. It looks like a win-win all around. But the majority of the music industry is still against DRM-free music.

The RIAA and Sound Exchange are among the many music industry supporters of DRM. EMI and several indie labels are for DRM-free, and currently service unprotected MP3s to iTunes and eMusic. However, with current wave of sales drops and overall paranoia gripping the music industry, it is unlikely that we will see DRM-free music adopted universally any time soon. So, until subscription services adopt DRM-free music as the default, enabling cross-platform use, subscription services are not destined to be the wave of the future.