Sunday, February 19, 2012

Subscription Services: The Future of the Music Business (And Content In General)?

I've covered the various problems that enforcing artificial scarcity in the information age has on society. But almost the entire "creative industry" has made a business model out of artificial scarcity (because copyright encourages it). How would they survive without it?

There is a business model for imaginary works that works without artificial scarcity. You don't impose restrictions on how a piece of content is used or distributed. People are free to share what they want, when they want, with whoever they want. They can remix and create new works. And they have access to all the world's content. Yet, authors still get paid. This business model is called "blanket licensing". Ideas for blanket licensing have been popularized by MIT as a solution to music piracy in their Open Music Model.

Limited forms of idea have been put into implementation. Spotify is a example of a post-scarce music outlet. With a single $10/mo subscription you can access tens of millions of tracks of music, something 20 years ago you might have to have been a billionaire to have. It gives "pirate-like service" at a reasonable cost. That's exactly what people want, pirate-like service with no artificial scarcity at a reasonable cost.

Spotify has the blessing of the "Big Four" record companies who collectively have copyright over a very large amount of music. This shows that even the "music dinosaurs" seem to be open to this idea of "unlimited access to all the music".

Hulu Plus and Netflix can be considered limited post-scarce outlets for video content, although the movie industry has been a bit slower than the music industry in adopting blanket licensing and post-scarce business models (they still practice "windowing" extensively, which is an invitation for piracy). They will get there eventually.

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