January 27, 2010

Omnifone and HP Partner to Distribute MusicStation Desktop

Earlier this week Omnifone and HP announced a partnership to distribute the MusicStation Desktop music service on 16 HP PC models in 10 European countries. The service will provide unlimited access to millions of tracks from Universal Music Group, Sony Music Entertainment, EMI Music, and Warner Music International as well as leading independent labels. It will be preloaded on new HP Pavilion, Compaq Presario, and HP Envy models, and will offer a 14 day free trial. MusicStation will be available to users of new HP PCs in the UK, France, Germany, Italy, Spain, Austria, Belgium, The Netherlands, Sweden and Switzerland, who will be able to download, play, and share tracks on their computer for a monthly subscription fee. Tracks are downloaded directly via the Internet to the PC for online and offline playback; subscribers can also burn 10 tracks a month into DRM-free MP3 files. The monthly subscription fee is £8.99 in the UK, €9.99 for Austria, Belgium, France, Germany, Italy, The Netherlands, Spain, CHF14.95 in Switzerland, and 99SEK for Sweden.

OK, I am generally skeptical of subscription based music services since they rely on the customer having a sufficiently short music attention span such that the user is always seeking new sounds to replace the old. Otherwise, the user ends up paying rent for his/her music forever, which can far exceed the cost of purchasing the CD or other legitimate download, even in the overpriced retail music haven known as the EU. However, this partnership differs from past approaches whereby I think it might actually make financial sense to the user, especially if he/she is prone to purchasing single tunes as opposed to entire albums. Although the service is predicated upon playback on a PC, the growing number of media center PCs does somewhat blunt this shortcoming, however, the lack of an integrated portable device a la the iPod does place this at somewhat of a disadvantage over iTunes and other competitors. But on the other hand, this service does not require the upfront purchase of a portable media player and 79p/99cent per track charges and users can indirectly load their prepaid 10 tracks/month onto an MP3 player if they wished.

Granted, I have not been over the pond for a couple of years now, but even then an £8.99 CD was at best a discount label reissue of public domain songs from the Edwardian era. Hence the ability to burn 10 tunes a month from the major music labels for less than 10 quid is notable, and effectively positions MusicStation Desktop as a gigantic music preview service. As such, it could also help drive additional offline purchases including CDs, or other pay per song downloads, which would accrue to the labels’ bottom lines. In the realm of popular music, especially for those in the younger demographic or those with an insatiable appetite for only that which is currently charting, this try it all and keep some of what you like approach may prove to be an good fit with the market; it might represent a new balance between the rent forever and buy it all up front schemes that exist today.

At the same time, there are other market segments where I do not expect to see much uptake. For those whose tastes tend towards the high-art end of the music spectrum or view the album as a audio mural intended to be enjoyed from start to finish, it seems unlikely that a piece parts approach to audio fulfillment would be well received. Further, the ardent audiophile is unlikely to consider digitally compressed music to be of sufficient quality, they might in fact still prefer the drop of the tone arm into a vinyl groove over even the best mastered DVD-Audio, let alone MP3 download. But then again, these are likely not the markets that Omnifone and HP are seeking with this announced partnership.

So overall, I think this musical partnership has a rational premise, and may prove to be well suited to certain market segments. It offers incremental revenue to the partners involved and record labels, and it is a low risk affair for the customer. In the consumer marketplace, this is a good balance between risk and reward. It will be interesting to see, er… perhaps hear, just how well it all plays out.