South Africans venturing online to buy music downloads need to shop around, because some retailers can be almost 12 times more expensive than others.
The cheapest download option available to South Africans appears to be eMusic, the R130 a month subscription that allows consumers 75 songs at R1,70 each. The most expensive option appears to be Exactmobile, which charges a whopping R20 a song.
eMusic also offers 50- and 30-song packages to consumers, which translate into song prices of R1,94 and R2,16 respectively. Local retailers sampled by the Mail & Guardian sell full tracks from anywhere between R5 and R20.
Internationally, the most successful retailer of music downloads has been iTunes, which sells individual songs for the equivalent of R6,40.
Earlier this year Apple chief executive Steve Jobs said iTunes sold more than one-billion songs in 2006, an average of R5-million worth of songs a day or 58 songs every second.
But South Africans do not have an iTunes store to access because Apple took issue with South African copyright law.
As the music industry moves into the era of digital distribution and retailing, there is a mad rush to create new business models, with many atypical companies moving into the music retailing space.
In the past few years in South Africa companies such as Musica, Pick ‘n Pay, MTN and Telkom have ventured into the music download arena, with more entrants expected.
The latest to join the fray was Vodacom, which announced its subscription-based music download service this month, soft-launched with British company Omnifone.
The new music download service is called MusicStation and allows Vodacom customers to download an unlimited number of the million songs available to their handsets for a weekly subscription of R25.
But there is a catch. As soon as you unsubscribe from the service, you lose access to every track you might have downloaded, plus the music has digital rights management (DRM), which means it cannot be transferred to any device from your phone.
It is still unclear whether a subscription service like this will be successful and whether consumers are prepared to lease music rather than own it.
The service is available on only three handsets, the Sony Ericsson K800i and W880i and the Nokia 73 Vodafone Live!, but this will increase to 10 handsets by the beginning of December.
Although digital music sales have sky-rocketed internationally, the South African market is still in its infancy, with most retailers still selling DRM-protected music, despite evidence that consumers want to be able to play the music on their phones, computers and MP3 players.
EMI, which was the first major label to move away from DRM-protected music, has reported significant increases in digital sales of some of its most popular titles since the move.
Since EMI removed DRM-protection from its catalogue, it has witnessed a 115% increase in digital sales of Coldplay’s album, Rush of Blood to the Head, and a 272% increase in digital sales of Pink Floyd’s Dark Side of the Moon.
MTN Loaded portal manager Thabiet Allie says DRM is used to protect the artists from piracy and that MTN has taken a position that DRM will be enforced.
Set music free
The writing is on the wall for major record labels unless they downsize and move into new revenue streams, such as artist representation, touring and merchandising.
A recent analyst report on the Warner Music Group states that “an increasing majority of worldwide consumers simply view recorded music as ‘free'”.
“A new model for music consumption must emerge and that model most likely involves DRM-free downloadable music at no cost to consumers, fully supported by advertising (within some form of social networking environment that enables consumers to discover/explore music),” say Richard Greenfield and Mark Smaldon in the report for Pail Capital.
Greenfield and Smaldon say the fact that established artists do not need record labels anymore is a concerning trend, citing Madonna’s recent exit from the Warner stable.
British rock group Radiohead also left their major record label EMI recently, choosing to sell their record directly to their fans through their website.
Radiohead’s recent album, In Rainbows, was sold directly to fans who were asked to pay what they wanted for the album.
“Artists such as Radiohead are proving they can sell music quite directly to fans, while other acts — such as Nine Inch Nails — are stating publicly that music is far too expensive,” say Greenfield and Smaldon.
Nine Inch Nails front man Trent Reznor recently left his record label, Interscope, and announced that he would sell any future Nine Inch Nails releases directly to fans.
Reznor produced the new Saul Williams album, The Inevitable Rise and Liberation of Niggy Tardust, which fans could download directly from the artist’s website for free or a fee of $5 for top-quality MP3 files.
“Artists make the vast majority of their money on touring and merchandise, not CDs,” say Greenfield and Smaldon. “In turn it is increasingly logical to believe that artists want to have their music reach the widest possible audience at the lowest possible price … meaning free.”
Greenfield and Smaldon predict that CD sales will decline 25% to 30% in 2008 and report that digital sales have seen a 50% increase in 2007.
Greenfield and Smaldon argue that the major labels’ insistence on selling DRM-protected downloads is preventing growth in digital music sales and that the sooner they embrace DRM-free downloads the sooner their prospects for survival will improve. — Lloyd Gedye