“The reality is that on-demand music is a consumption medium, and giving it away for free just kills the industry.” That’s according to Ministry of Sound boss Lohan Presencer, who is asking for music services to remove the free option.
It follows a series of high-profile musicians and brand labels speaking out against the failure of the freemium streaming model, which is incapable of bringing revenue in without huge numbers of viewers.
Presencer is calling for YouTube, Spotify, Rdio and all other streaming services offering a freemium model to drop it, in favor of some type of “pay-as-you-go” service that offers microtransactions for a day-pass, or possible 1000 plays.
This type of pay-as-you-go model has never been tried - potentially because the music industry will not accept this type of service - but could be an interesting new way to make revenue without a normal subscription.
Even though Spotify and Rdio have both faced criticism over the freemium model, YouTube is normally left out. YouTube allows channels to be set-up to get better metrics on viewers and ad-revenue, which in turn keeps most music labels happy.
YouTube is also much larger than Spotify, meaning a song listened to 10 million times on Spotify will be watched ten times that amount on YouTube. It is easy to see why large labels are not that bothered when it comes to YouTube’s model.
That said, YouTube is working on some subscription services, like Music Key for $7.99 (£5.30) and an apparent subscription service to move video ads.
Apple is also apparently not going to feature a free version of Beats Music, when it launches at WWDC 2015 in June. Beats Music will be the first large-scale music streaming service without the freemium model and it will be interesting to see if Apple can win over customers.