Overt Benefits of Subscription Music Services

On this, the 25th anniversary of the CD, I contemplate a conversation I had two weeks ago with executives of Universal Music Group.  In separate conversations, the executives and I discussed and debated why more people are not subscribing to music download services, like Real's Rhapsody or Yahoo! Music, where you can have millions of songs at your fingertips, rather than buying them in CD form (at least for now) or as digital files.  One interesting point made was how consumers perceive music acquisiton.  For years consumers have been conditioned, and the business model has been, that one purchases an album or CD for their personal collection and has the right to play this physical form factor wherever they can or desire.  While some individuals have slowly moved to the concept of "renting" music the music industry, and its digital media distribution partners, have done little to market this paradigm shift to the vast majority of consumers who still think they should own a physical form factor for their collection.  Think of the benefits of having access to millions of songs in an instant with the ability to download them to any device that uses a standard DRM, like Windows Media.  Think about the economics.  It would cost $1.0M to download and OWN 1 million songs (not that many people would do this, but bear with me).  At $15 per month, one could rent this many songs for 5,555 YEARS before they reached $1.0M.  So why not rent?  If you rented music for 55 years of your life (ages 15 - 70) you would only spend $9,900 (not adjusted for inflation).  Sounds like a bargain!  Of course, most consumers would ague that they do NOT own or plan to own 1.0M songs, but the point is there is a plethora of music that consumers listen to, even if they do not purchase it, that they would probably listen to during certain events, activities in their home while entertaining, or athletic activities, for example, if it were available.

I entered the discussions with the UMG executives from the perspective that a consumer OWNS the music he/she buys.  I left thinking, hmmm, maybe there is a better way.  It would benefit the music industry and its partners to educate consumers on the economics, "Overt Benefits" and "Dramatic Difference", quoting from Doug Hall's Laws of Marketing Physics, of a consumer service of this nature.  As Mr. Hall states in his book, Jumpstart Your Business Brain, "customers can not and will not read your mind.  If the benefit is not overtly articulated, it isn't there." 

Its hard for consumers of traditional form factors (e.g CDs) to understand the value of converting to a music service when the Labels keep marketing, distributing and investing in physical media over digital subscription services.  If subscription services are a key point in the Music Industry's strategy for driving new revenue streams, its time to overtly articulate the benefits to consumers.