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Watson-Research Study Finds Big Five Music Labels Continue To Ignore Consumers' Online-Music Needs
SAN FRANCISCO--Dec. 10, 2001-- Watson-Research's latest digital entertainment survey reveals that the post-Napster era of online music is still baffling to the Big Five music labels. In its understandable drive to monetize the huge consumer interest shown in Napster-like, free-music download sites, RealNetworks has launched its RealOne Service. The consumer feedback that we have received in our recent survey suggests that merely renting music is likely to be as successful a marketing strategy as DIVX was for Circuit City - fine on paper, but nobody came. "It is clear that there is a real need for a legal and inexpensive way for consumers to download music and to be able to use it the way they do now, freely copyable to their portable devices"' was how Watson-Research's President Oromond Stacker summarized the consumer feedback obtained during its recent survey. "Unfortunately, the three strikes against the current incarnations of MusicNet and Pressplay will further prejudice the market against online subscription music services." The Three Strikes Against RealOne A major obstacle for online music services is that consumers have been exposed to free-music on the web and any subscription service is going to be a hard-sell. However, a reality of the post-Napster era is that subscription is inevitable and many consumers we questioned conditionally conceded that some form of subscription is fair - as long as the service provided was also fair. The major objections raised during our interviews can be clustered within the following three specific complaints: Music is only for rent and only for 30 days: 100 songs streamed and another 100 downloaded isn't enough for the $9.95 monthly subscription, and outrage that it's really a rental and not a subscription. MusicNet offers a limited catalog: Enough said. MusicNet represents three of the `Big Five'--Bertlesmann's BMG, AOL Time Warner Music and EMI. Its putative rival, Pressplay, to be launched later this month, represents the other two, Universal Music and Sony Music. Microsoft's Windows Media will be Pressplay's player, so no convergence likely here and at least two subscriptions will be required. Lack of Portability: The ability to listen to music on devices other than the computer is a given for a successful service. Many respondents cited portability to the increasingly popular MP3 players as a pre-requisite for even evaluating a subscription service. Conclusions The Big Five Music Labels seem to be arrogantly laying down the 'rules' for online music services as if they feel they don't need to respond to consumers' actual needs. Our research strongly suggests that this is, at best, naive. There is the potential for enormous revenues and profits from monetizing online music services. If a fraction of the resource that had been put behind the gala unveiling of RealOne at Le Parker Meridien had been put into quality market research and acted upon, then services such as MusicNet and Pressplay would stand a much better chance of realizing those profits. Free-music service Morpheus understands the needs of its user-base. Monetizing a Morpheus-like service should be the goal.
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