So Spotify just hit 10 million subscribers. Not Netflix territory (48 million and counting) but impressive nonetheless. The cable television industry has enjoyed a run of 30+ years with dual revenue streams of subscriber fees and advertising to create and sustain its success, for both content providers like A&E, Discovery, Disney, and Turner Networks, and the distribution platforms belonging to Comcast, Time Warner Cable and so many others. And I’ve often stated, it’s been a remarkably durable model in the face of massive and historic changes in technology, macroeconomic conditions and consumer preferences. So maybe it isn’t so shocking for the music industry to look to that model as a way to its future. It’s not one way or the other between advertisers and consumers as funding sources…it’s got to be both for the music industry just as it has been in multichannel video.
Here’s a good piece with more numbers about the growing importance of subscriber fees today in the digital music industry and the need for that growth going forward.