The University Of Hertfordshire just released the results of a survey for UK Music that deals with the desirability of music streaming services. In short, it doesn’t look good. The bottom line: despite a slight decline in illegal downloading, kids want to own free MP3 downloads instead of paying for a premium streaming service.
Drilling down into the numbers leads to some very interesting information.
61% of respondents file-share, marginally down from last year’s 63%
Of those, 83% share weekly or daily. And they do so to get free music (40%), to get rare tunes (23%), to try before buying (22%).
I can buy those numbers. Sounds reasonable. But here’s where things get interesting. 85% of P2P downloaders would pay for an all-you-can-eat MP3 download service. Of those, 57% would then stop using P2P; 77% would continue buying CDs.
But the survey reveals a potential blow to Spotify’s model – 78% do not want to pay for a streaming service, an increase from last year‘s 65%, despite the emergence of the fashionable model. The number of people who would pay for streaming has crashed from 35 % last year to just 7%.
Furthermore it appears that streaming won’t kill piracy – 49% of those who would pay for unlimited streaming would continue pilfering from P2P. And 89% still want to “own” their music. Most people are fully aware that P2P sharing and downloading, copying CDs for friends and downloading from storage sites like Rapidshare is illegal, but they go ahead and break the law anyway.
There’s lots of other interesting data in the study, but what this tells me is that Rob Wells and his team at UMG are the smartest of all the label guys The new models that they are pioneering are ahead of the curve if you believe that university’s study, and I do.
The most vocal opponent to Wells’ and UMG’s initiatives is Thomas Hesse of Sony. I met Thomas when he first got the job years ago. I like Thomas. He’s a decent person. I was personally supportive of him during the root kit fiasco. I even defended him with Andy Lack. But Thomas, you’re moving backward. You’re stuck in retrograde. Thomas, dude, you have to get with the program in order to grow your business. The old ways just don’t work anymore. By standing on the sidelines you’re losing revenues as well as any chance of being a market leader. The industry needs for you to be bolder and more experimental and adventurous. You can do it!
The Hertfordshire survey sends a clear signal—a road map in effect—as to where the record labels must go in order to have any chance at all to gain traction in the marketplace. But, and it’s a big but, they can’t continue to get crazy greedy with huge advances and outrageous revenue shares. In order to nurture the business, they have to become more realistic and act as true partners in helping new digital services succeed by not breaking the bank from the onset.
In addition, labels need to start turning these deals around quickly and not in the usual 12 months or so. It’s absolutely ridiculous that the licensing process takes so long. It’s costly and by the time the deal is signed its usually outdated. There’s just no reason why a license can’t be done in 20 pages or less within 4 weeks time. Anything longer is just bullshit.
So here’s to the UMG team-Rob Wells, Simon Watt, Francis Keeling and Nicola Levy. Let’s just hope that others follow their lead. Actually, when you really think about it, the others will eventually have no choice but to do so. So why waste time?
