Make Money From Online Music

How to make money from online music

Now that online music streaming service Spotify has raised another chunk of cash to expand into the US, the question of how to make that money back is getting even more pressing than before. On the face of it, it has some impassable problems: it can't sell very much advertising, because that would ruin the service, and if it's not selling very much advertising the urge to upgrade to a monthly paid-for premium option in order to avoid that advertising isn't going to be very attractive.

One thing it's doing is making its mobile applications premium-only, which is smart but limited. And people are talking about it being a competitor to iTunes, which is also smart but also limited. If you can play the tune on your computer for free any time you like, why shell out for a copy?

But there are entire swathes of clever things it could do, if only the rights owners allow it. The option to take a playlist and turn it into an instant CD - or fifty instant CDs, or five thousand - would open up a whole new market for social sharing of music. Any social get-together where music is a feature - weddings, birthday and anniversary parties - becomes a market for this sort of micro-label; instant keepsakes, ways to share the celebrations with people who can't make it, and sheer convenience, all take advantage of the way that CDs are universally playable and very durable. You just can't do that with MP3s.

Then there are retail outlets, promotional events, and any number of "Now That's What I Call Industrial Goth Electro-Tribal #45" compilations that individuals or small companies might want to create and sell, just because there's a market they understand better than anyone else. All of the above would benefit from a publish-on-demand musical compilation service.

Of course, this immediately upsets the rights owners, who retain their deathly fear of anyone smarter than they getting an even break. In a sane world, they'd be offering the above services themselves - imagine logging onto the RIAA website, composing a playlist of 1950s big band music and having Aunty Ethel receive her birthday CD in the post, nicely packaged and produced, two days later. All the problems in doing this are rights-related, and the rights owners are in a terrific position to solve those problems.

They won't do it - and to be honest, I'd rather they didn't - but they should get out of the way of companies like Spotify or last.fm - anyone who has a demonstrable love of music and understands consumers - who can create entirely new markets. And doing new things, not trying to emulate the old, is the only way that the industry as a whole will grow to the advantage of all.