HITS Daily Double
"File-sharing sites have a wider selection of music than legitimate services? Stop the presses. Where do I line up to pay $600 for this report? This boy's got insight!"
——an exec at a paid service


Research Firms Tell Industry Why Paid Sub Services Don’t Work—For a Price
When Redshift Research and Odyssey step up with some analysis, people listen.

Who, you ask?

Why, "a leading authority on digital entertainment and peer-to-peer services" and a company that "delivers representative consumer research that informs innovative demand-side strategies," respectively, according to their PR. Both firms have released studies saying that consumers find Pressplay, MusicNet and Rhapsody less appealing than free P2P services like KaZaA and Audiogalaxy.

Of course, no one has ever made such claims before.

In its latest report, Fighting the File-Sharing Dragon—available for $595 as a .pdf document via Redshift’s site—it’s revealed that "the number one complaint by consumers is the narrow selection of music offered by the fee-based services." The report and its sequel purport to explain how to make consumer offerings more attractive.

"Subscription services are not being given the popular music needed to compete against widely used, free file-sharing networks," proclaims Redshift Prexy Matt Bailey, who was a founder of expired research firm/online journal Webnoize—and thus knows a thing or two about not competing.

"File-sharing sites have a wider selection of music than legitimate services? Stop the presses," exclaimed an exec at one of the subscription services. "Where do I line up to pay $600 for this report? This boy's got insight!"

But Redshift will undoubtedly make some money on this enterprise, since one of the other companies mentioned didn’t want to comment to HITS until it had read the survey—and thus forked over 600 clams to be told its offerings were out of step with consumers. Other "companies mentioned" in the report, according to Redshift’s site, include AOL, Clear Channel, EMI, Warner Music, Liquid Audio and many others—all of whom will have to buy the survey to find out what’s being said about them. Unless someone puts it online for free, that is.

Of course, they may also want to shell out the same amount for companion study The Economics of Music Subscription. Oh, and consulting services are also available.

Come to think of it, that’s not a bad little business model!

Meanwhile, Odyssey’s semiannual Breadbox survey claims that 31% of U.S. online consumers over age 16—which it calculates as over 40 million—have not only downloaded music but do so as often as 11 times a week, which must really cut into masturbation time. The astronomical growth of such activity, Odyssey’s founders reason, creates consumer expectations that the paid services have been unable, thus far, to meet.

"Today’s digital music services were meant to solve the industry’s problems, not meet consumers’ needs," declares Odyssey Managing Director Sean Baenen.

"Just as cassette tapes offered the ability to reproduce and separate tracks," Baenen adds, "digital technology is giving consumers more choice and more control of their music consumption across the board. We’re seeing a sea change, and from the consumer perspective, it looks as if the industry is still out shopping for boats."

Such assertions aren’t exactly earthshaking—they’re made regularly all over the press, and the reasoning can be had for the price of a newspaper, if not for free. But Redshift claims to back up its argument with "feedback from a panel of digital music consumers" as well as test-drives of the services themselves, while Odyssey’s conclusions are drawn from "national random-sample surveys of 3,000 consumers, representative of all U.S. consumers 16 years of age and older." As far as you know.

Their results are hardly reassuring for anyone hoping to get consumers to subscribe to an authorized download or streaming service.

It’s hard to argue with the surveys’ insistence that "legit" sub services don’t boast the range of music to be found through file-sharing networks, and that the latter have gotten millions of consumers accustomed to having total control over digital music. But not everyone is buying the research companies’ wholesale dismissal of the larger paid services.

"Conspicuously absent [from the Redshift release] are the results of the question of how consumers feel about the speed, quality, and value-added portion of the subscription services," argues Internet consultant Karen Allen. "My guess is that the sub services fare better on all counts than all of the P2P services combined.

"The subscription services, however, do need to aggressively work towards clearing the rights to more songs, particularly the currently popular ones, and towards licensing more labels," Allen concedes. "Consumers have demonstrated that they will tolerate a lot in order to find the songs they are looking for. Depth of catalog and freedom of use are becoming paramount indicators of whether a music service will succeed or fail."

Apart from reiterating what’s been bandied about in places like the San Jose Mercury News, Reuters and the online water-cooler-for-digerati known as the pho list for ages, though, this week’s surveys seem to assume that officially offering all the music in the world online, in an unprotected format, is a simple matter of throwing a big switch.

Despite chapters on everything from KaZaA usage stats to compression rates for digital encoding, Redshift’s Dragon breathes no fire on the question of how paid services can get all concerned parties to agree on what should be offered when and in what form.

Just ask the folks who run Pressplay, MusicNet and Rhapsody how many players are involved in the decision to put one track in one place—even in encrypted, timed-out form. We can start the list for you: Publishers. Managers. Artists. Different labels within the same group. Different departments within the same label. And attorneys—oy, the attorneys.

We’ll gladly tell you more, but it’ll cost ya. Once we receive your check for $799, we’ll mail you a copy of 2 Legit 2 Quit, our groundbreaking study of how little some people know about actually selling stuff.

Except surveys, that is.