“The subscription model of buying music is bankrupt. I think you could make available the Second Coming in a subscription model, and it might not be successful.”
Steve Jobs famously made this proclamation to Rolling Stone in 2003. While it’s easy to smirk at inaccurate predictions about the future made ten years ago, it’s hard to believe anyone could have predicted the rise of subscription services.
In terms of music, the lead alternative to buying is to subscribe to Spotify. Originally developed in Sweden, Spotify looks and acts like a piece of software on your computer like iTunes. The only difference is you can only search and play songs when you’re online (or those that you have specifically made available for offline play) and your library contains all the music that record labels have signed over.
Similar services had launched before, but none had made it off the ground. One of the reasons subscription services have taken off where they had previously failed may have to do with the banner ads and “radio” ads that allow users to access Spotify without paying the fee (paid subscriptions eliminate the ads). Pandora pioneered the technique of Internet radio that served as a halfway point between radio controlled by DJs and music you control like Spotify. Not only did the free option allow users to get used to the service, but smartphones with data capabilities made listening to the music via apps much easier than setting up a computer.
The other leader in streaming right now is Netflix. The growing popularity of downloading movies and TV shows from services like iTunes or OnDemand have been eating away at DVD sales for years. Netflix has taken perhaps the biggest hole out of the service. Originally styled as a mail-order version of renting services like Blockbuster, Netflix introduced its instant streaming service and changed the way we consume TV and movies forever.
Some of the factors that contributed to Netflix’s success include the fact that TV season DVDs were teaching viewers the benefits of marathon viewing, something that Netflix readily enables. Similarly, broadband Internet allowed streaming video services purchase that had previously been unavailable. Also, the recent release of Blu-ray as the successor to DVD, a technology that itself had only been recently introduced, discouraged consumers from investing in a new technology by repurchasing all their movies. With one subscription they could have their entire library updated for a new era.
The subscription model coupled with the Internet has breathed new life into physical services as well. The Dollar Shave Club provides razor blades for a monthly fee and you can get just about anything from clothes to coffee through similar services these days.
It’s important to note is that these platforms only pay for themselves when users consume more than enough to make up for the costs. The services subtly encourage that kind of behavior, such as when Netflix prompts the next episode of a show you’ve been watching to start soon after. If you consume that much media, the service ends up being worth it (so long as your Internet never goes out, something that seems less and less likely every day).
[author] [author_image timthumb=’on’]http://ourspace.thesanjosegroup.com/wp-content/uploads/sites/3/2014/05/Our-Space-Kaz.jpg[/author_image] [author_info]Kaz is a Junior Executive at SJG. He earned BAs in English Writing and Business Marketing at Illinois Wesleyan University and is currently pursuing an MA in Advertising at The University of Texas at Austin. Outside the office, Kaz consumes gobs of media including but not limited to books, magazines, music, movies and television.[/author_info] [/author]