USA Today: Online music subscription services offer free options

September 27, 2011
By Jefferson Graham, USA TODAY

Listening to on-demand music online is now free and legal, almost everywhere.

Want to check out the latest song from Lady Gaga over and over again? On Facebook and subscription service websites, that can be easily arranged.

Music subscription services Spotify, MOG and Rdio — which for years tried to sell consumers on paying $4.99 to $9.99 monthly — are taking a new tack to get you to buy.

Following in the footsteps of European sensation Spotify, which offers free ad-supported music and subscriptions, MOG has ditched the credit card-only route to listening in favor of ad-supported and friend recommendations. Rdio will offer similar ad-free trials in October.

But the big action for all the services is the 800million-member social-network gorilla Facebook, where they expect the masses to push subscription music to much larger, meaningful audiences, thanks to the ease of listening.

Now, instead of going to the services’ websites and registering with your credit card, you can register with a click or two when you decide to check out a song your friend posted in Facebook’s News Feed.

(That’s the good news. The bad news for those concerned with privacy is that your friends get to see what you’re listening to all day. Embarrassed about your love for Barry Manilow and New Kids on the Block? This isn’t the place for you.)

“When you click to hear a song, it creates a new user for us,” says Axel Dauchez, CEO of Deezer, a Europe-based service that’s part of the new Facebook Music initiative (but not available in the USA). “The Facebook integration will create tens of millions of trials for my service, and my goal is to convert them to paid subscribers.”

Free online music in the past has meant illegal downloading at pirate sites, paying 99 cents to $1.29 per download at iTunes and Amazon, or listening to a free radio service such as Pandora or iHeartRadio, which create custom stations based on your tastes. However, music royalty rules stipulate that for online radio, you can’t choose the exact song you want, and you get to hear the on-demand artist only three times an hour.

That’s where subscription music comes in. It’s unlimited, on-demand listening to a library of more than 10 million songs. And because the music is online, you don’t have to worry about space on your hard drive for songs. Everything is available at a click, as long as you’re connected to the Internet.

For years, industry pundits have predicted the decline of the download and rise of subscription services, because consumers get so much more, financially. But most services have struggled to find an audience. “The biggest obstacle is the credit card,” Dauchez says.

While iTunes has sold more than 10 billion songs since 2001, the combined reach of the most popular subscription services is a little over 5 million.

Spotify has 2 million subscribers; Deezer, 1.2 million. Rhapsody, the most popular service in the United States, has 800,000 subscribers. MOG and Rdio won’t reveal their numbers, but analyst Ted Cohen of TAG Strategic estimates that each has fewer than 500,000 subscribers.

Rdio COO Carter Adamson says that for most people, online music is either through iTunes or Pandora. “Most people just don’t know what we’re all about,” he adds.

Facebook’s 800 million members “will bring a huge spotlight to the concept of subscription music,” that’s never been there before, Cohen says.

There’s also the ability to make sense of that huge virtual record store in the sky.

Rdio built itself as a “social” discovery engine, showing off what friends are listening to as a way to figure out new music choices.

By adding in the Facebook components, “it brings the idea home, in front of a lot of people,” Adamson says.

By blurbing to Facebook friends what you’re listening to, and how you’re listening to it, “Your friends are seeing MOG, probably for the first time … and seeing that the world of music is available for for free,” says MOG founder David Hyman.”

What’s not to like about that?

Where to get music for free

On or off Facebook, there’s a bounty of on-demand music to listen to:

MOG. Just introduced free online listening, with a limited amount of music at your disposal. Recommend the service to your friends (on Facebook or on the MOG website) and you get to listen to more. The service is ad-free until November. Subscriptions start at $4.99 for online listening, and $9.99 for mobile access.

Rdio. In October, credit card-free PC listening trials begin. Subscriptions are $4.99 and $9.99 monthly.

Spotify. The European sensation dropped its “invitation only” policy last week, and is now open to Facebook members, too. (Sign up for Facebook and get an account.) Music is free and ad-supported for six months. After that, the limit is 10 hours a month free, with ads. Subscriptions start at $4.99 for PC listening, and $9.99 for mobile access.

Rhapsody. Its free, credit card-less trial is extended to 30 days and includes mobile exports, which means you can download songs to your iPhone or Android phone, which you can’t do with MOG, Rdio or Spotify. The trial can only start on Facebook, not on the Web.

Courtesy USA Today:

Posted by Ted • Tuesday, September 27, 2011 .