Original URL: http://www.theregister.co.uk/2011/09/30/we7_radio_transition/
We7 morphs from jukebox into a radio station
Users un-demand on-demand
Posted in Media, 30th September 2011 08:37 GMT
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Is there anyone in the world who needs to know the difference between "on demand" and "non-interactive" music? We use the words "jukebox" and "radio" as shorthand – but really, no one should care.
But in the archaic world of music licensing, the two command different royalty rates – and the higher on-demand rates are squeezing the suppliers towards radio.
The Peter Gabriel-backed music service We7, one of the first ad-supported music services, this week completed the shift from jukebox to personalised radio station – having previously been a shop. The company says higher supply costs are a factor: the PRS charges 0.065p per play for an internet radio service, versus 0.085p per play for an on-demand service.
We7 announced the shift last November [1], having lost £3.68m in 2009, with revenue of just £361,081.
This week it completed the transformation – although members are still entitled to 50 on-demand tracks a month. The pay side offering ad-free and mobile access continues.
"We believe that a radio-with-request service is easier for more people to get access to more music without effort, you just sit back and just enjoy the music," CEO Steve Purdham told us. "Rights-holders are imposing more restrictions upon free music services in an attempt to protect the value of music – but in fairness, only 2 per cent of our users request more than 50 tracks a month."
Pandora's phenomenal growth in the US has helped make the move look like a positive one. The US company successfully went public this year, and while it is still in the red [2], looks healthier financially.
It makes you wonder who, if anyone, can capitalise on Spotify's self-inflicted wounds this week. ®