Monday, 6 October 2008

Total Music will leave real music fans wanting

I’ve read with interest some of the coverage over last week’s announcement by Nokia on its highly anticipated Comes With Music service. It’s fascinating how much of the debate has missed the point entirely. The two most major of many criticisms levelled at Nokia have been for the fact that the service is a) heavily DRM’d (not MP3) and b) non renewable without a new device (i.e. not a music subscription service).

Those look like heavy limitations – and they are. But that isn’t the point of Comes With Music. Nokia isn’t really launching a music service so much as the mother of devices that happens to have music on it. Since nobody, including Nokia, knows quite how consumers will respond, the whole thing is an experiment – but a pretty significant one for the music industry.

You can see where it might lead. Project ahead just a couple of years. Buying a new hi-fi for Christmas – great - do you want the one with or without music? New car – with or without music? Laptop – same. No wonder the clever Omnifone is in discussions with servicing these platforms.

New fridge, microwave, disposable razor – would you like that WOWM (with or without music)? Maybe that’s going a little far but you get the point. One way or the other we are rolling slowly, inexorably towards music ubiquity. And, for many of us, that is both a hard concept to accept and an even harder one to understand from an entertainment point of view.

Think of an example – how many of your favourite albums did you become instantly attached to while snacking through it track-by-track , 30 seconds at-a-time, on your phone, on the bus, in a hurry to get to work and in a bigger hurry to check out the other 116 tracks you downloaded that morning? Answer = none. To really enjoy your music it just can’t work like that.

A few years back when Napster and Rhapsody launched what will now be known forever as ‘1st generation music subscription services’ i had a good play with both. For the first three months i was like a kid let loose in a sweet shop. The ability to sample whatever new music you wanted when you wanted (remember Windows DRM 10? I got it working on one Creative Zen device with both Napster and Rhapsody side-by-side! It blew up, but it was beautiful for a while there).

Then something curious happened – actually two things. First, i became blind & deaf when i signed in – i just couldn’t decide which of the 3 million songs i wanted to hear at that moment. Second, i got fed up spending all my precious listening hours ‘sampling’ new stuff that i didn’t ever get to really like. I listened to a lot of crap basically. I also suspect that most of it actually wasn’t crap, but just didn’t sound as good as it deserved to, when there was so much stacked up in the queue right behind it.

The concept of listening to whole albums became unworkable. I missed the old way of giving a record time to grow on you. Giving it time to unfold and reveal itself to you as a thing of relevance and depth, sometimes beauty (in a way i imagine the creators kind of had in mind). Hell i even think it may have helped to have invested some cash in the music to get proceedings underway! At least spending a tenner on the album motivated me to LISTEN and to listen properly, repeatedly.

This ‘snacking fatigue’ is the hidden downside in total music services and it may well be a more significant problem in the long run than compatibility and price. It’s these factors combined that result in the heavy churn rates for music subscription services (note snacking fatigue doesn’t have the same impact for movies, games or sports).

But will snacking fatigue weaken a proposition like Comes With Music? Not necessarily. For starters, by wrapping the music within the life-cycle of the device, Nokia has cleverly minimised churn at least within the first 12 months.

Beyond that, it’s really all about the audience. Nokia has thought this one through as well. CWM is squarely aimed at a younger music & phone fan, who probably file-shares regularly even though they can well afford to obtain a cool device. To the under 24 tech savvy multi-tasking brigade, music just isn’t what it used to be and they just don’t care. Music is a song-led snack, a soundtrack, a backdrop. It’s also sometimes used as social glue - it’s an APP for goodness sake.

A shame but there you have it. The key question is this: as a business, would we (the collective music industry) rather have £50 for everything, than £0 for nothing. The answer isn’t straightforward because it doesn’t fit well with the current supply model.

I think it’s worth a try, because it might be the beginning of something – and that something is a new, legal relationship with the under 24 year old modern music fan. The ones we’ve largely lost.
This brings questions for Nokia which go beyond the obvious ones raised so far. How does Nokia plan to gather & use consumption data to understand the CWM customer base? Will it share the data? How can it quickly segment those users with higher value potential and offer added-value services to keep them? What suite of added-value services will CWM develop? No doubt these are areas in which mobile network operators feel they could play a part.

We’ve recently witnessed another small success in one area of the uncomfortable marriage between music and technology - once again courtesy of Apple. The popularity of music related applications such as Shazam and Pandora for iPhone, demonstrate where we are headed. As with ringtones, it may well be that applications built to make music more fun on platforms like phones is where the future value is for tech-friendly audiences – play-listing, quizzes, rock family trees, games, re-mixing etc. And these apps work best when the music is just there, not a transaction away.

And for us real music fans, the old guard (note, plenty of under 24s fit into this category as well)? CWM just isn’t for us is it? The limitations are off-putting, but so is the snack fatigue. So is the sound quality of file playback on the phone. Nothing about it is for us just yet. Whether Nokia, and other new providers ushering in music ubiquity want to change that, is up to them.

This does mean that for the time being the industry can relax about one thing – cannibalisation. CWM, in its current form, won’t cannibalise music sales. It just won’t. Recent data from TNS ‘suggests’ that users of total music services in the UK might download 2.1 billion songs a year. Whatever this curious data point actually means (what possible value does a stat like that add?) it’s mildly interesting and encouraging that enough people are interested in the total music concept at all and that many of these are frequent file-sharers. But, for reasons discussed here, the impact on the business in the first few years is unlikely to be anything spectacular (see Jupiter's more sobering but realistic analysis on Mark Mulligan's blog).

This is the start of a new relationship with a large group of important music consumers. It’s how we manage that relationship over the next few years that will matter most.

No comments: