I keep saying that we’re still in the early stages of social music apps and the reinvention of digital download. Apparently Sony Entertainment Chief Tim Schaaf agrees with me. After spending the first decade of the new millennium reeling from staggering revenue loses, divesting of CD pressing plants and distribution contracts, Schaaf spoke with evolver.fm about how Sony plans to take on Itunes and Spotify.
I am interested in Sony’s next moves for two reasons:
1. Sony owns the largest music publishing catalog in the world. This means that they own the content that Spotify, iTunes, Pandora, and everyone else has to pay a helluva lot for. Not only that, they have the bargaining power to negotiate favorable rates with the two remaining music industry behemoths: Warner Music Group and Universal Music Group.
2. Music is not Sony’s ultimate end. Just like iTunes was the means for Apple to sell iPods, Sony’s new music ecosystem (if done correctly) could be an effective way to hock consumer electronics. With increasing music and social media integration into TVs and gaming systems (both of which Sony makes) the possibilities of what Sony could provide are super interesting.
I’m not saying Sony is going to win out of the gate, because they have made plenty of false starts and missteps along the way. Anyone remember Beta Max or Qriocity? But with the right plan and execution Sony could use its vast music catalog, Playstations and TVs, and global marketing force to annihilate Spotify, Mog, and Rdio.
Let the games begin.
Here are eight reasons why Tim Schaaf thinks Sony Music Unlimited stands a chance in this new, connected phase of digital music (spotted over at hypebot):
1. The Music Industry Is Rebounding
Granted, there’s always someone willing to say that the music industry’s darkest days are behind it, but Schaaf is correct in his observation that things are finally starting to make sense.
“Although the last ten years have been nothing but carnage, we’re in a place today where there is going to be a rebirth in the music industry,” said Schaaf. “What we definitely saw in the past year is the balance point where the digital sales account for a significant enough proportion of the overall sales that you can imagine that taking over. The mood that I see in the music industry is that digital isn’t a problem — it is a tremendous opportunity now… It’s not about stopping things anymore, it’s about starting things.”
2.Sony Music Unlimited Is Big, and Sony Is Global
Sony Music Unlimited has a global catalog approaching 15 million songs (as many as any other subscription service), according to Schaaf, up from about six million when it launched. To get there, it has to license music from competitors to Sony’s own major label, Sony Music. However, he says, independent labels and competing major labels alike have no problem licensing Sony’s music service.
Then, there’s “big” as in geography. Sony Music Unlimited is currently in ten countries, having launched a first-of-its-kind radio subscription in Germany, and Schaaf says Sony is “aggressively” pursuing local music from each country to make the service more attractive to the residents of various territories. Ultimately, he hopes to expand the service much further. PlayStation is in over 50 countries, and Schaaf thinks Sony can possibly launch this music service in all of them, even though that presents licensing complications. Which brings us to…
3. Sony Has PlayStation Network
Sony counts over 90 million PlayStation Network accounts, accumulated over the past five years. Those people can activate 180-day trials of the Sony Music Unlimited service. Everyone else gets a 30-day trial, though –and unlike with MOG or Spotify, they must supply a credit card to join to the free trial. However, those PlayStation Network users already have a billing relationship, and a longer trial window, and, again, there are 90 million of them.
Sony has yet to capitalize on one aspect of PlayStation: using a smartphone to control music playback on it. We suggested that Sony give that idea some thought, because when videogame people pick up a videogame controller, they don’t typically have music on their minds.