20 May 2010

Spotify cuts prices as streaming services multiply

Spotify is halving the cost of its ad-free music streaming service (in Europe) from £9.99 a month to £4.99.   This is a naked bid to woo more customers.  Mobile users have been kind to Spotify, but the numbers just don't stack up - 320,000  premium customers from over 7 million resistered users (just 4%).

The new Spotify tariffs:

Spotify Unlimited: £4.99 per month for ad-free music with no mobile access, offline, MP3 play or high-bitrate streams

Spotify Open: Ad-free, with no invite, mobile, offline, MP3 play or higher-quality streaming and limited to 20 hours a month

The £9.99 Spotify Premium package remains in place for higher-fidelity mobile access

Spotify Free also remains but still requires an invite

The new price (4.99 a month) is aimed at mainsteam target consumers, people who are the larger part of Spotify's seven million plus registered users and whose primary need is for desktop streaming.

In March, We7 showed the way for Spotify when it revealed a premium model at £4.99 per month for unlimited web-based play with the £9.99 per month model enabling addtional mobile access.

Napster too recently relaunched as a lower-priced, £5 per month streaming service, with five free MP3s each month.

Mog.com launched a per month All Access streaming service in the U.S.A in December and is soon set to launch in the UK.

£5 seems to be the magic number that consumers may sustain.   Which streaming service will survive?

5 May 2010

News Corp subscriptions

Rupert Murdoch's News Corp will unveil what they described as an “innovative subscription model” next month. During the Q3 earnings call yesterday it was also announced that the group made revenues of $8.8 billion. Murdoch said the the group has been speaking with a broad base of potential partners.

One caller asked if there would be charges for charge for entertainment as well as news (clearly bearing in mind the imminent launch of the Times' paid-for-content model) , the response was affirmative.

Murdoch went on, “Everybody’s been negotiating with Apple about television shows, films - we do VOD, everything’s on there.”

So, will the new offer be be a competitor to iTunes Store, utilising News Corp's Hulu TV? We'll have to wait and see - watch this space.

Murdoch's approach to building a broad, cross-media empire is starting to make sense. As I've noted in earlier posts the time ripe to re-architect his various interests to take advantage of the synergies it offers.

We know that the Times websites will cost £1 a day, £2 a week or free with a print subscription from June, thoug details on the latter bundle are hard to come by.

Perhaps, as I've always maintained, Times Online could charge subs along with a BSkyB satellite TV subscription . . . Why stop there? Other News Corp offerings - say, movie tickets or previews - are just as likely in my view.

In a universe where content is king, and where News Corp controls a large proportion of the means of its production, it wouldn't suprise me if we are seeing the makings of the largest cross-border integrated paid-for-content model yet.

4 May 2010

The Times, they are a' changing . . .

News International staff have been told to expect a 90% fall in traffic once the Times paywall is introduced in June this year.  No suprises there. 

The success metrics staff have been set include how successfully they have maximised advertising revenues, commercial revenues and subscription revenues, as well as the extent to which the paywall helps stem the fall in newspaper sales.   It was always going to be about money.   I wish them luck, it's a bold experiment.  

My gut feeling is that it won't work - the Times+ model costs a fortune and isn't all that compelling a reason to fork out for access to the Times websites.   As a consumer I want a high degree of relevance when I'm looking for content - I don't care about free tickets to Glyndebourne.   This is, as I've said before in this blog, about retention and cross-selling to maintain revenues within the Murdoch empire.    

Apple will shift its iTunes strategy by entering the cloud-based music streaming market, after it shuts down Lala, the music streaming service it acquired last year. It will face stiff competion from Spotify and We7. Spotify's recent upgrade allows users to import their music libraries into Spotify, putting the platform in direct competition with iTunes.

The digital downloads market in the USA and Japan is flatlining, with European markets set to follow a similar curve, the music industry desperate to find new ways of capturing audiences and revenues.