Trade Review: Week Eight (1/2)

Microsoft Offers Free Music Streaming, With Limitations

Joining the music streaming bandwagon, Microsoft is preparing to release a multiplatform integrated music streaming service call Xbox Music. Compatible and synched to a user’s Xbox, Microsoft Phone 8 and Windows 8, Xbox Music plans to elevate and personalize Microsoft products and the brand itself by competing with music streaming giants like Pandora, Deezer and Spotify. Already having a massive consumer population, Microsoft will have no problems in attracting users to their new music streaming service. While Apple has the largest musical library, Microsoft will once again have to compete with its biggest rival (Apple) in providing the better or equally large musical library. However, Microsoft is one step ahead of Apple in the music streaming sector, for Apple has only been rumored to be in the works of developing a music streaming software. Microsoft’s Xbox Music will have many features like ad-free subscriptions, multiplatform synchronization, personalizing playlists, scan-and-match to suggest new music based on your music library.

The major catch to Microsoft’s new service is that after six months of initial usage, the consumer will be limited in how many hours of music they are allowed to listen to per month. This completely counter-acts the unlimited aspect that most music streaming services provide and use as their main selling point. For Microsoft, their selling point is the fact that the music streaming works on 3 platforms (console, PC, and mobile) and can only work on Microsoft platforms alone that have been on the market since 2011: “older software won’t have access to the new service at the outset, nor will people with Apple’s mobile devices or those running Google Android operating system” (Sherr). Exclusivity of only contemporary Microsoft products is what Microsoft hopes will drive business and the fact that limitations are also set will encourage value in the program and of each song. By only allowing Xbox Music to be compatible with contemporary Microsoft products could also increase sales of products by consumers upgrading their devices; however this could also discourage consumers using Xbox Music because most do not want to purchase new systems to listen to limited music. 

Trade Review: Week Seven (2/2)

Deezer Gets New Financing, As Business Analysis Site Questions Current Streaming Music Model

Deezer, an Internet music streaming service similar to Spotify, just raised $130 million dollars from Access Industries and other music-media companies in an effort to buy out a few Deezer shareholders and bring in fresh faces with innovative ideas. Deezer, which has yet to penetrate the American market, looks towards expanding and taking asvantage of the untouched international countries. However, with a similar business model to Spotify, Deezer is already speculative of how long can the subscription service model for the recent, innovative music streaming service websites last: “once the venture capital that is propping up this seemingly booming market runs out, will there be a sustainable business without drastically increasing prices to the consumer, or renegotiating royalty terms with the rights owners” (CMU). For this reason, Deezer is hoping their new employees will bring a better, sustainable model that will have a lasting effect on the music industry.

With music streaming services having flat, monthly rates, a future change in their pricing to make up for lost revenue from uninterested users leaving the websites would create a similar downturn that physical CDs went through in the late 2000s. In light of this, Deezers wants to reassure music streaming lovers and future customers that they do not plan on making consumers foot this cost despite the ever-changing music market and consumer tastes. Deezer wants to reinvent the Spotify business model and turn it into a reliable stream of revenue for streaming companies and music industry sectors alike.

Trae Review: Week Seven (1/2)

Music fests like Austin City Limits taking live-streaming to the mainstream after bumpy start

With the multi-day concert festival season coming to close this year, live events have taken a major step in concert experience levels this year. After Jay-Z successfully broadcasted his concert live from Brooklyn, NY to over 50,000 people on YouTube, the notion of being able to watch a concert without having to buy a ticket brought a new facet to the music industry business model. Festivals like Coachella that broadcasted and created a full hologram concert with Tupac to now Austin City Limits broadcasting a multi-camera, TV quality concert series over the course of three days is a major indication that a multitude of revenue streams are being discovered for future, stable income sources. These broadcasted concerts allow people to still experience some of their favorite artists live in the comfort of their own homes, not have to stand in a crowd or consume overpriced concessions, commute to the event and most importantly purchase a concert ticket. 

I was at first skeptical that concert ticket sales will decrease from live streaming and as a result push concert ticket prices up in order to make up the lost revenue of quantitative purchases. However, for festivals like Austin City Limits, the $200 tickets sold out after an hour going online and had over a million people in total stream in to the concert for an average time frame of just over an hour (Associated Press). With advertisement banners in front of consumers for that long of a time period is major extended face time for advertisement sponsors. These advertisement spots do not even have to make up for lost ticket sales because the ticket sales for concert series like Austin City Limits sold out; therefore, this is an additional revenue stream for the concert that is also a great advertising opportunity for the festival itself for future consumers. However, some artists will not agree to the live streaming because they dislike the notion of being on live internet-TV. Artists claim it provides a “historical archive” performance where people can go back to judge the performance and create an incredibly meticulous, high-standard audience across all genres (Associated Press).