My view is that internet music subscription services may be facing a
situation not unlike the market for sat phones, sat radio, etc. These
markets all have small cores of enthusiastic users who will pay whatever
to get the service. But the business model ain't there because the
market is too small. The barrier to growth isn't the price, but rather
the limited attraction of the service that results in a too-limited
market opportunity.

With all the alternatives available, I think the Napsters of the world
are finding that it's hard to charge for something that most people find
is equivalent to what can be obtained for free. Whether it is equivalent
or not is not the issue.

My prediction is that most of the current providers will be gone in a
few years. Ironically, there are some similarities between music
(whether sold or streamed) and the now-struggling print media. In both
cases, people thought the Internet would provide opportunities for new
growth and revenue forms.  It turns out instead to be an agent that
breaks the historical business model altogether.


-- 
Goodsounds
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