By Richard Menta 8/01/02
The record industry's peer-to-peer networks have hardly been the most popular offerings. How can they be? Not only do they charge egregious prices to download tracks you can pick up free from the Napster clones, but they have been highly restrictive in terms of the music that is available and what you can do with it once you spent your cash.
The end result so far for the industry services has been a lukewarm reaction from the consumer market. We predicted this last year when MusicNet and Pressplay announced their terms of membership.
Pressplay only offered the music of Sony, EMI, and Vivendi Universal plus some independents. MusicNet the other major labels. On Pressplay, for example, the cost was $14.95 a month for a mere 50 downloaded songs and 500 streams. Furthermore, those songs could not be played on a digital portable player and only a handful could be burned to a CD. Not very appetizing, even when not compared to the convenience and accessibility of the free Napster clones.
We said last year that the market would force these services to reduce the cost and restrictions over time. Do that or fold. After the resignation of Pressplay's CEO earlier this year I suspected the latter might indeed be the case for that organization, but yesterday the company announced a significant easing of its restrictions in order to drive more business.
The new service will now charge the same $14.95 a month, but now will offer unlimited downloads for the fee. For those with broadband who download heavily, that can become quite cost effective. Still, there are restrictions that will hold potential new users back.
First of all users will only be allowed to burn 120 tracks per years to CD. Second, Pressplay still does not offer the music of all the major labels. Third, sources say that some tracks available presently on the service will not be available on the new plan, further reducing the music pallette. There is reason to ease these restrictions further if not remove them all together.
In a recent survey, Edison Research found that "The majority of music downloaders do have "some reservations" about artists' and labels' not being compensated but download music for free anyway". This means there is a market who will indeed pay for digital music files online, even if they are available for free from other sources. It just has to be at the right price and under the right terms.
Pressplay's offerings are still not under the right terms, but the pricing is much closer, especially if you download a couple of hundred tracks per month as an average. Considering that file trading has been going on for several years now with minimal effect on CD sales - unless you think a 5% drop in sales this year has nothing to do with a recession, or the rise in DVD sales, or the fact that prices have gone up twice in the last year-and-a-half to $20 - it eventually can lead to a legitimate new revenue source for the major labels.
MusicNet should follow Pressplay's lead. They have to, because if both services are to remain viable, they still have a ways to go.
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