The paid for content movement got another boost as Last.fm begins introducing a premium subscription model as it attempts to generate more revenues.The CBS-owned music community first talked about the new service more than a year ago when it said users would get to stream more than three full tracks in a row under a subscription service.
According to Paidcontent, Co-founder Richard Jones has now confirmed Last.fm will from March 30 charge around £3 a month for the existing "Last.fm Radio. This is a catch-all term that refers to personalised, back-to-back full-track streams. The fees will initially apply everywhere except the UK, US and Germany or everywhere that it does not have a significant user base.Last.fm like everyone else has been hit as online advertising as slowed and CBS wants to see some return on the £141m it paid for Last.fm in May 2007.Paidcontent also says that when Warner Music Group did not to renew its deal with Last.fm in June this was partly because of disappointment at failure to introduce a subscription service. Although it does still have deals with Universal, EMI and and BMG.The paid for content ball is certainly rolling. Spotify, which recently reached one million registered users since it launched last October, already charges 99p or £10 a month for a great library of music and shows that people are willing to pay for premium services.With newspapers looking really seriously there is likely to be a significant announcement on this market in the coming months. A trickle and maybe then a flood.
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I've been thinking about this debate for a while but haven't uttered a word on it for some time. Likely because I've been getting so much out there on the web for free. It's the problem I see with ‘subscription’ services.
Other than my super-essential utilities like the lecky and gas bills (may I call these essential subscriptions?), I've got my mobile, cable, landline, broadband, hobby (insert hobby here ----- ) and possibly a charity, or two even. And I haven't even mentioned the car and the kids.
Before the web, I bought a newspaper if and when I wanted; CDs if and when one took my fancy. I rented a DVD if there was something worth watching. But if I have a whole lot of subscriptions and say things get tight - current climate type tight - don't you think I'll just knock those subscriptions on the head.
Charities are currently taking a hammering (al least here in Ireland) – regular donation cancellations are reaching 20 to 30% - as people view their donations / subscriptions as unnecessary.
OK, the analogy is a bit rough around the edges but my point is this - people in the mainstream do not like having subscriptions. They are usually on an annual basis and once you’re in you can’t cancel or at least it’s difficult to get out of in the short to medium term.
If you look at magazine ABCs the majority of sales are newstrade:
For example, Cosmopolitan – 13% subscription; Radio Times – 14%, Sunday Times – 12%, Marie Claire – 14%. And a lot of the subscriptions have large discounts. Would any of these survive online if this was the rate of current unique users to subscriptions? I don’t know exactly but I’ll go out on a limb and say ‘no’.
Of course, the picture changes when you become more specialist: New Scientist – 68% subscription; The Economist – 60%; Campaign – 65%; and Time 67%. Let’s call this premium / specialist content and the previous examples ‘mainstream’ consumer content which is where I want to focus.
Now look at the mobile phone market and the difference between pre-paid and post-paid. The overwhelming majority are pre-paid – up to 70% plus. The opposite to subscriptions for premium / specialist content. Why? Financial control, of course. The mainstream consumer wants to keep control.
I don’t know where this paid-for-content / free-content debate is going to end up (I’d be laughing all the way to my private island if I did) but I do believe we’re a long way off average Joe or Jane allowing a plethora of subscription services the privilege of dipping into his or her wallet every week, month or whenever….. ?
I think you hit it when you said "more specialist" currently these are the only titles that charge. I don't think you can retreat from free news, but there might be specialist streams or services that people might pay for.
But increasingly I think the generalist you are the more difficult it is to charge.
If i worked in advertising I already buy Campaign, would i pay for some of its services online? Yes maybe. Would I pay for news? No.
Subscription services are not going to be for the majority, but at the ABC1 end of the market.
Gordon Macmillan
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