Open music model
 |
The open music model is an economic and technological framework for the
Since its creation in 2002, a number of its principles have been adopted throughout the recording industry,
Overview
The model asserts that there are five
| # | Requirement | Description |
|---|---|---|
| 1 | Open file sharing | users must be free to share files with each other |
| 2 | Open file formats | content must be distributed in open formats with no DRM restrictions
|
| 3 | Open membership | copyright holders must be able to freely register to receive payment |
| 4 | Open payment | payment should be accepted via multiple means, not a closed system |
| 5 | Open competition | multiple such systems must exist which can interoperate, not a designed monopoly |
The model was proposed by Shuman Ghosemajumder in his 2002 research paper Advanced Peer-Based Technology Business Models[1] at the MIT Sloan School of Management. It was the first of several studies that found significant demand for online, open music sharing systems.[5] The following year, it was publicly referred to as the Open Music Model.[6]
The model suggests changing the way consumers interact with the digital property market: rather than being seen as a good to be purchased from online vendor, music would be treated as a service being provided by the industry, with firms based on the model serving as intermediaries between the music industry and its consumers. The model proposed giving consumers unlimited access to music for the price of $5 per month[1] ($8 in 2023), based on research showing that this could be a long-term optimal price, expected to bring in a total revenue of over US$3 billion per year.[1]
The research demonstrated the demand for third-party file sharing programs. Insofar as the interest for a particular piece of digital property is high, and the risk of acquiring the good via illegitimate means is low, people will naturally flock towards third-party services such as
The research showed that consumers would use file sharing services not primarily due to cost but because of convenience, indicating that services which provided access to the most music would be the most successful.[1]
Industry adoption
The model predicted the failure of online music distribution systems based on digital rights management.[6][7]
Criticisms of the model included that it would not eliminate the issue of piracy.[8] Others countered that it was in fact the most viable solution to piracy,[9] since piracy was "inevitable".[10] Supporters argued that it offered a superior alternative to the current law-enforcement based methods used by the recording industry.[11] One startup in Germany, Playment, announced plans to adapt the entire model to a commercial setting as the basis for its business model.[12]
Several aspects of the model have been adopted by the recording industry and its partners over time:
Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven't worked, and may never work, to halt music piracy.
– Steve Jobs, Thoughts on Music[13] open letter, 2007
- The abolition of digital rights management represented a major shift for the industry. In 2007,
- Open payment was relatively straightforward to implement, and the iTunes Store offered gift cards, which could be purchased with cash, from its launch in 2003.
- In 2010, iPhones.
- In 2011, Apple launched its iTunes Match service with a subscription model, supporting file-sharing between a user's own devices.[17]However, the subscription price did not include the cost of acquiring content, which would still have to be purchased on a per track basis from the iTunes Store.
- Pricing close to the model's suggested $5 per month price, or its $9 per month market clearing price, has been adopted by many platforms:
- In 2005, Yahoo! Music was launched at $5 per month with digital rights management.
- In 2011, Spotify introduced a $5 per month premium subscription in the United States with digital rights management,[18] recognized as adhering closely to the model.[19][20]
- In 2011, Zune Pass, at $10 a month.
- in 2012, Google Play Music launched unlimited music streaming for a subscription price of $9.99 per month.[21] Users can upload their own MP3s to the service and download them, but cannot download songs they have not uploaded themselves.
- In 2014, Amazon added DRM music streaming to their Amazon Prime service.[22]
- In 2015, Apple announced Apple Music, which would offer unlimited streaming of songs encrypted with FairPlay DRM for a subscription price of $9.99 per month, and compensate artists on the basis of song popularity. Apple reportedly wanted to enter the market with a lower price but was pressured by record labels to adopt a higher subscription fee.[23]
- According to inflation calculated through the United States Consumer Price Index calculator, the $9 per month estimated market-clearing price in 2002 would become US$13.72 per month in 2021,[24] closer to Apple Music's family plan price of $14.99.[25]
See also
- Comparison of online music stores
- Comparison of on-demand streaming music services
- Disk sharing
- Fan-funded music
- File sharing
- File sharing timeline
- File-sharing program
- Peer-to-peer
- Record industry
- Subscription business model
- Threshold pledge system
References
- ^ hdl:1721.1/8438.
- ^ Gautham Somraj Koorma (November 27, 2015). "On-Demand Music Streaming to battle Piracy". iRunway.
- ^ Marco Consoli (July 3, 2014). "Spotify, il business folle sbarca a Wall Street". L'Espresso.
- Gazeta.pl.
- )
- ^ a b Ruth Suehle (November 3, 2011). "The DRM graveyard: A brief history of digital rights management in music". Red Hat Magazine.
- S2CID 16332051.
- ^ Sungwon Peter Choe (2006). "Music Distribution: Technology and the Value of Art in Society". KAIST.
- ^ Andrew Traub (November 25, 2009). "Open music model". US Intellectual Property Law. Archived from the original on January 1, 2011.
- ^ Yrjö Raivio (December 4, 2009). "Mobile Services and the Internet: A Study of Emerging Business Models" (PDF). Helsinki University of Technology.
- ^
Matěj Myška (December 2007). "Flat Fee Music" (PDF). Masaryk University Journal of Law and Technology. Archived from the original(PDF) on July 18, 2011.
- ^ Playment. "Playment – Our Solution". playment.com. Archived from the original on June 19, 2012. Retrieved June 15, 2010.
- ^ a b Steve Jobs (February 6, 2007). "Thoughts on Music". Apple Inc.
- ReadWriteWeb. Archived from the originalon May 10, 2012. Retrieved June 16, 2010.
- MacWorld.
- FastCompany.
- ^ Erik Rasmussen (November 16, 2011). "Cloud Music and iTunes Match".
- ^ Charlie Sorrel (July 14, 2011). "Spotify Launches in the U.S at Last". Wired.
- ^ "Napster and the proliferation of OMM (Open Music Model) | Metal Insider". March 21, 2019. Retrieved November 7, 2021.
- ^ Sharma, Prajwal (September 12, 2021). "Why is PinkPantheress' Just a Waste Not On Spotify?". Otakukart. Retrieved November 7, 2021.
- ^ Jefferson Graham (June 24, 2015). "First Look – Google Play Music has 1000s of free music playlists". USA Today.
- ^ http://www.windowsobserver.com/2014/06/12/the-gotchas-of-the-amazon-prime-music-service/
- ^ Popper, Ben; Singleton, Micah (June 8, 2015). "Apple announces its streaming music service, Apple Music". The Verge. Vox Media. Archived from the original on June 9, 2015. Retrieved June 8, 2015.
- ^ "CPI Home : U.S. Bureau of Labor Statistics". www.bls.gov. Retrieved November 7, 2021.
- ^ "Apple Music". Apple. Retrieved November 7, 2021.