August 29, 2006

A new business model for online music

There was an interesting article in the NYTimes about a new approach to online music:

Universal Music, the world's largest music company, has agreed to back a new venture that will allow consumers to download songs for free and instead rely on advertising for its revenues.The new service, known as SpiralFrog, represents a departure from the 99-cent per-song business model made popular by Apple's iTunes store. It will begin operations in December...Customers will be able to download an unlimited number of Universal songs to their computer and one other device. They will not be able to transfer those songs onto a compact disc, and they must visit the site at least once a month to maintain access to their music.
It is pretty sad that it has taken this long for the music industry to develop any of these online alternatives. Napster first came on to the scene six years ago. In many ways the music industry has only itself to blame for the situation it is in.