Old-time industries have continued to falter when adapting to new technological realities. This seems to play most prominently in the publishing and music industries. Their business models have been upended by the web, and while they continue to exert their power, that will only last so long. With new, cheaper ways to enjoy media we’re going to see a change in how they’re consumed. Rdio seems to be on the right track.
The outfit, powered by the founders of Kazaa and Joost founders Niklas Zennstrom and Janus Friis, moves in a direction we’ve seen many companies take. Instead of providing music on a per-song basis, they’re providing a cloud-based streaming experience that allows users to access not only their own music, but additional millions of songs. These aren’t yours to own, but rather options that you can stream at any time. This, I think, is the way many services, perhaps even iTunes, will go.
The streaming service certainly has value of its own. You can use it right from your desktop, or you can take it on the road with the Android app. Rdio syncs with your iTunes library, so you can easily stream the songs you already own. Then you can search out new music, both on your own and by seeing what your friends are listening to. This, I think, is worth a subscription. I’m inclined to agree with Erick Schonfeld of TechCrunch when he says that the $10 mobile subscription price point is a bit high. You’re not getting any actual music, just the means to listen to and discover music.
Again, that’s worth something. If it were $5, and therefor $30 per year, I could see the value. I say this because the app not only provides some level of value on its own, but is designed to get people to actually buy the tracks. Remember, the songs in the cloud are available to you only when you’re within reasonable cell range. Go underground on the subway or fall out of range and the app becomes temporarily useless. If you buy the tracks, priced at $0.99 to $1.29, you can then listen to them anywhere, even if it’s not on your Android device.
The idea, I think, is to build up a catalog similar to that of Rhapsody and Napster. Rdio falls short of that right now, with only 2 million songs available. But as they grow they’ll add more songs. Perhaps they think that it’s worth the $10 per month for the streaming package once they build up the library. Again, I disagree. Keeping the streaming cost low will encourage more people to sign up. The more people who are signed up the more potential track sales they have.
Rdio is not available to the public now, but it is in a private beta. TechCrunch still has some invites, which you can get here. It’s definitely worth the look if you’re willing to slap down the $10 per month. If not, maybe you’d best be waiting for a price drop. I really think it will ultimately benefit all parties.
