Can the music industry dance to the Club Penguin boogie?

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The music industry says that P2P hurts artists (and the industry), but P2P users have become accustomed to downloading music for free. Is freemium a potential compromise?

In this week's lecture we briefly discussed a hypothetical music business model that balances unpaid digital downloads with ticket sales for live concerts... Hmm... Sounds like freemium! You get unrestricted access to the main course – songs, in digital form – but you don't get dessert – live gigs, standard and limited physical releases – unless you pay.

Compare this pay-for-concerts model to the Club Penguin model and you see an immediate difference. Where's the premium digital content? Club Penguin's physical merchandise can be equated with the concerts and physical albums from our music model. However, Club Penguin's subscriber content constitutes an additional digital-only category of premium content. If you give away digital songs, what do you have to offer as paid-for digital content?

Perhaps the music industry needs to find something other than songs to offer as premium digital content. How about a live stream of a studio performance that can only be accessed with a unique code that you receive after purchasing songs? This example may not be the best (someone could record and distribute the stream!), but my intention is to suggest that this way of thinking merits further investigation.

Our hypothetical model seems to come close to the current reality of the music business, with one major difference: people are paying for digital downloads. The Norwegian research discussed in lecture and a 2006 Canadian RIAA study both seem to indicate a self-mediated freemium among P2P users, whereby each user determines what they personally deem to be content worth paying for from the pool of free content. Maybe this shows that services like Spotify and KKBOX, which separate song content into free and premium versions before reaching the consumer, have a valid place in the market.

Compromise seems increasingly necessary, but the music industry would prefer access to digital songs to be completely locked down. If Apple found a way to block all illegally procured content from your iWhatever-you-use, would you continue to use it or seek out an alternative?