Comments on: subscriptions vs sheets http://gonze.com/blog/2009/09/14/subscriptions-vs-sheets/ internet music technology Tue, 07 Feb 2012 22:25:23 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: aram http://gonze.com/blog/2009/09/14/subscriptions-vs-sheets/comment-page-1/#comment-3862 aram Mon, 14 Sep 2009 17:52:39 +0000 http://gonze.com/blog/?p=1993#comment-3862 As an early advocate of subs, I still have a weak spot in my heart for the biz model. I think there's still a substantial potential customer base for them, especially if they include (a) unlimited DRM-free downloads (which UMG has already gotten behind), and (b) streaming to mobile devices, with caching, a la Spotify. Obviously, the market size won't be anywhere near $40B global (record retail at its peak), especially in the early years of deployment, so they need to be integrated with other revenue models, from ad-based to licensing, and supported by 360 artist management. All that being said, your math is off. 25mm subs x $10/month is actually $3b per year, not $250mm. Which is a pretty nice chunk o' change. And 100mm people at $20/month (which I believe is an unfeasible price) would actually deliver $24B in annual revenues. As an early advocate of subs, I still have a weak spot in my heart for the biz model. I think there’s still a substantial potential customer base for them, especially if they include (a) unlimited DRM-free downloads (which UMG has already gotten behind), and (b) streaming to mobile devices, with caching, a la Spotify. Obviously, the market size won’t be anywhere near $40B global (record retail at its peak), especially in the early years of deployment, so they need to be integrated with other revenue models, from ad-based to licensing, and supported by 360 artist management.

All that being said, your math is off.

25mm subs x $10/month is actually $3b per year, not $250mm. Which is a pretty nice chunk o’ change. And 100mm people at $20/month (which I believe is an unfeasible price) would actually deliver $24B in annual revenues.

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