I had hoped we might see an unlimited music download and streaming ISP subscription service in 2010 but the industry continued to move at a snail's pace
I've learnt to be careful with making predictions for the coming year when it comes to the music industry, as it has usually moved at the speed of a snail. A year ago I was making the case for an unlimited music download and streaming ISP subscription service. The ISP that seemed the closest to offering such a service was Virgin Media, after it announced its intentions in the summer of 2009. My hopes appeared to be dashed, however. Meanwhile, BSkyB announced this month the closure of its very limited music subscription service, Sky Songs.
But Virgin Media had not given up. It was recently reported that the ISP was in talks with Spotify, in an effort to offer the music service bundled with its subscriptions. One might think of this as an attempt to avoid drawn-out licensing negotiations with the labels, as Spotify already has licences in place. But the deals that the labels have in place with Spotify (of course, their negotiations are covered by non-disclosure agreements), would most likely have clauses that would require re-negotiations when a third party is involved. It's been suggested that Spotify is seeking up-front guarantees from Virgin Media, in the same way major labels would have done when making a deal with Spotify. This, and reports that the ISP wants exclusivity, may explain why there's currently no set date for a Virgin Media/Spotify launch.
Back in October I suggested the major labels should develop a music service platform themselves that could be offered to ISPs, since the lack of such a platform is usually the first stumbling block for ISPs looking to offer music subscriptions. Now it seems they've been beaten to the punch by Media Service Provider (MSP), whose chairman is Andy Heath of the independent music label and publisher Beggars Group. Last week, Ireland's leading ISP, Eircom, launched a music streaming and downloading service, using MSP's platform. I've had a look at it, and although it doesn't provide unlimited downloading I'd say it offers much better value than the failed Sky Songs. If you're an Eircom subscriber you get free unlimited streaming. For an extra ?5.99 (�5.11) a month you get 15 downloads (DRM-free), and for ?12.99 you get 40 downloads a month. You do have to use up your ration every month, as it won't carry over to the following month. However, if you want to download more there's a top-up feature.
The Eircom music site, called MusicHub, is easy to operate with features such as editors' picks, playlists made by artists, and "artist radio" (which plays a mix of tracks by the same artist). A feature similar to Twitter allows you to follow other users that have similar music tastes, with feeds showing songs they recommend and the option to see what music they're listening to. Users create their own homepage and can add pictures to the public playlists they create. There is an option to report playlists that are offensive (no, you can't get a playlist removed for featuring Bon Jovi ? only if the picture or name of the playlist is offensive). You can also message other users directly ? and no matter how much you move around the site, moving back and forth between pages, the song you've selected keeps playing.
So far, Eircom has licensed 4-5m tracks, though only 2m tracks have been uploaded to the site at the moment. It is computer based, but Eircom is looking to offer offline mode later next year.
MSP is aiming to provide its platform to ISPs in other countries, and its offer has definite advantages for ISPs. Danish ISP TDC says that since it launched its music subscription service it has seen a 50% drop in churn for its broadband customers, as well as the added revenue from subscriptions. Yet, unfortunately, we may have to wait to get such a music service in the UK, as record labels are much more reluctant to take such a risk in a country that still has significant legal digital music consumption. Countries such as Ireland and Spain, which see very little income from digital music, and eastern European countries that lack iTunes or other legal alternatives yet have a well-developed internet infrastructure, are much more likely to see labels license such services.
There are rumours that the record labels are looking to carry out a test case in the Isle of Man to see what effect an unlimited ISP service has on music revenue and illegal filesharing. I'd suggest they do their test in Hull instead, as the population would be much more representative of the rest of the UK, and the local ISP, Karoo, has a monopoly in the area.
So, I won't make the prediction that we'll see a solid ISP music service in 2011. Getting the labels to agree on the terms of such a service could take years, judging by Virgin Media's efforts. I do predict, however, that the Digital Economy Act won't have any effect on illegal downloading in 2011: the first warning letter could be sent out in July, at the earliest, possibly not until 2012, and appeals by people who receive those letters could lead to costs that would cripple the rights holders financially.
Oh, and I have one more prediction: Rumer will win at least one Ivor Novello in May.
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