Peter Kafka

Recent Posts by Peter Kafka

Would You Pay $162 a Year for All the Music You Can Eat?

That’s the offer, sort of, being made by something called Datz Music Lounge.

The details, from MusicWeek (via Coolfer): You give the company 100 British pounds, and for the next year you can download all the music you want. And because you’re downloading the files in the unencrypted MP3 format, they are yours to keep, and yours to do whatever you want with: Play them on any Apple (AAPL) iPod or iPhone, make copies, burn them to CDs, etc.

Are there catches? Of course: The offer is only available to U.K. residents, who have to use a special USB dongle to make the Datz software work, and it only works on PCs running Microsoft’s (MSFT) Windows, for now. Most crucially, the company only has music from two of the big four music labels–EMI and Warner Music Group (WMG)–and it doesn’t even have all of those companies’ new releases, but a “wide selection of new music released in 2009.”

But play along, for just a minute. Say Datz does end up striking deals with Sony (SNE) and Universal Music Group (and the other big indies), and does end up getting most of the majors’ catalogs. And say Datz is still able to keep the price point about the same: Something in the $15 a month range for unlimited music to own. Could that work, from both a consumer and industry perspective?

Yes. It could.

That’s around the same price point as music subscription services offered by RealNetworks’ (RNWK) Rhapsody and Napster’s (NAPS)/Best Buy’s (BBY) The big difference: Those services only give you access to music, not ownership. And while I’m not hung up on owning music as long as I can get what I want when I want, I’m in the minority on this one.

But if you could hang on to your music–and not have to worry about what format you’re using, since MP3s will work on all formats–then that seems like a compelling offer. The thought of shelling out $162 in advance will likely give people pause, but presumably Datz could figure out a way to extract the payments, à la the mobile carriers, over a one-year period.

Meanwhile, $162 a year is much, much more than most people were ever spending on CDs, even during the format’s boom years. And those, obviously, are long gone. Today the industry would be pleased if the average consumer spent $20 a year on music, no matter what format it’s in.

And yes, we know what many of you are going to say: Why pay for music at all when I can steal whatever I want? Or the faux-sophisticated alternate version: Music should be free! Because it can be replicated for no marginal cost!

Well, can’t argue with that–unless you’re in favor of compensating people who create intellectual property for their work. And I’m one of those old-fashioned types who still thinks that’s a good idea. Hope Datz can pull this off.