Tee shirts and the digital music industry

It’s a pretty sad day for the digital music industry when one of its most innovative streaming services has to resort to selling tee-shirts to cover the cost base. http://bit.ly/4tigaf.

8-tracks is a playlist streaming website that has nailed its specific niche. – ie playlist driven online radio discovery. Its user experience is best in class and navigation is second to none. Its discovery engine driven by friends is the best you can get bar the Spotify playlist sharing.

Decent affiliate programme (which I’ve never used), tagging, commenting, embed and social media features are all market leading. The only thing missing is the obligatory iphone app.

So why does it have to sell tee shirts? Bear in mind that 8 tracks is already cost effective by paying minimal licence fees through some interesting legal loopholes in the US.

Its simple. It is not possible to stream music legally on the web and get even close to breakeven. The record labels are in the industry of extracting large up front licence fees from start ups. Nice business if you can get your hands on it. However, long term the record industry is getting more and more out of touch with its customers. The market has moved on. Customers expect free music. The only value out there going forward is for giving the user a genuine music discovery experience. Good discovery = premium product = monthly monetary sub.

At some stage soon, 8 tracks will turn on some form of monthly subscription offering. Be it premium b2b sales for music promoters, or greater suites of functionality for its normal punters ( full on demand streaming, iphone access with caching etc).

For the time being, I hope they sell some tee shirts. Its a serious site with a great vision.

Declan