Thursday, February 17, 2011

Will Cloud-Based Music Services Ever Become Standard In The U.S.?

Has anyone that you know, including yourself, purchased a substantial amount of cd's over the last year?

The old industry model of both physical distribution and retail may be on it's last legs as the industry struggles to maintain it's foothold on the model they created.

With rumors of new cloud-based music offerings surfacing everyday, when will they finally emerge and gain enough traction to penetrate the US music industry?

This may eventually prove to be the ultimate dagger for the record labels who are fighting harder than ever to find ways to maintain any form of control over their content and effectively monetize a new delivery system.

With SONY and it's partners, the other 3 major record companies, EMI, WEA, and UMG all on board to finally release it's "new born" child, Music Unlimited, in the United States, after offering it in several global markets, with the intention to capture the market and compete with other online portals that either offer digital subscriptions, mainly cater to online music consumers or offer indie artists a way to share their intellectual property freely, will this be enough? How will sound cloud based services both help the major companies and industry maintain it's current hold on the revenue pie, and offer something better to both artists and consumers alike? No one knows for sure, but I'm willing to bet my last dollar on it that numerous shadow companies are out there now waiting for this turn in the business model to take hold so they can find ways to circumvent it, the same way they did with physical distribution and retail.

Who will step up to take down Apple's iTunes? If Spotify even hammers out an agreement with the 4 majors, will they ever be as relevant to the market as iTunes has been? With their success outside of the United States, will Rdio, Grooveshark and Pandora be the answer for both radio and retail driven ads targeted to music consumers to prop up both industries simultaneously?

With BitTorrent and numerous other p2p sites biting the dust, will consumers be driven to buy into the idea of Music Unlimited, Spotify and others that want to recharge the industry with new "paying" consumers? No one knows for sure, because there hasn't been one company yet that has really offered anything outside the realm of earning revenue, vice offering something better for consumers in any platform, device, etc..

How will cloud based services affect the average middle class earner that now finds themselves struggling in a harsh economy?

According to the Census Bureau (http://www.census.gov/hhes/www/income/income.html), the national median household income in 2009 was $49,084 for single households and $71,830 for married households. Below we can take a look at regional differences:

Median Household Income

West: $53,833
Northeast: $53,073
Midwest: $48,877
South: $45,615

So with these figures that tout what middle class workers are earning, the economy in a tailspin, and numerous consumer services, and necessities of life (food, insurance, gas, clothing, etc..) going up, how will these new cloud based music services be a boon to the middle class earner's pocket book?

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