Open Music Model - Industry Adoption

Industry Adoption

The Open Music Model predicted the failure of online music distribution systems based on digital rights management. A startup in Germany, Playment, is working on adapting the entire model to a commercial setting as the basis for its business model.

Criticisms of the model included that it would not eliminate the issue of piracy. Others countered that it was in fact the most viable solution to piracy, since piracy was "inevitable". Supporters argued that it offered a superior alternative to the current law-enforcement based methods used by the recording industry.

Several aspects of the model have been adopted by the recording industry and its partners over time:

• The abolition of digital rights management represented a major shift for the industry. In 2007, Steve Jobs, CEO of Apple Inc., published a letter calling for an end to DRM in music. A few months later, Amazon.com launched a DRM-free music store. One year later, iTunes Store abolished DRM on most of its music.

• 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 2011, Apple launched its iTunes Match service with a subscription model, supporting file-sharing between a user's own devices. However, the subscription price of $25/year does not include the price of acquiring content, which would still have to be purchased on a per track basis from the iTunes Store.

• Variations of the model's suggested $5 per month all-inclusive subscription have been adopted by a number of platforms. In 2005, Yahoo! Music was launched with that price point. The combination of a subscription model and digital downloads (as opposed to streaming) did not come until later. In 2010, Rhapsody announced a download ability for their subscribers using iPhones. In 2011, Spotify introduced a $5 per month premium subscription in the United States. The Microsoft Zune offers a subscription service for music downloads known as a Zune Pass, at $10 a month.