John Gapper The music industry still waits for subscribers

Amid the uproar about Microsoft bidding for Yahoo, you may have missed the news that Yahoo is closing its subscription music service and instead throwing its weight behind Rhapsody.

Subscription music services, which offer you unlimited access to streamed music through your personal computer (and through your stereo, if you have the right equipment) are favoured by a lot of people in the music industry, and cognoscenti outside it, as the industry’s new financial model.

Instead of buying music, you in effect rent it for $12 to $15 per month. This turns music into a subscription service rather like cable or satellite television.

One devotee of the subscription music model is Rick Rubin, the music industry guru, who features in a recent article in the New York Times magazine. Another is Fred Wilson, the New York-based venture capitalist and music fan.

In principle, I am on their side but I think the idea is still a bit ahead of its time. As a consumer, it seems to me too complex to subscribe to music on a portable player, as Rhapsody offers with its Sansa MP3 players. Somehow, owning an iPod and some digital music feels more natural.

On the other hand, I recently tried out the Sonos music system, which allows you to stream anything you have on iTunes, or any subscription music service, throughout your home.

It was then that I started to see the point of subscription music. It changes the experience to be able to listen to anything you want in your living room or kitchen. I enjoyed listening to pop albums that I would probably never buy and a vast range of classical music.

More companies are offering technology that allows music to be streamed through speakers into various rooms rather than keeping digital files on computers or MP3 players. It can be done with the latest TiVo digital video recorders and Logitech is about to launch an updated music streaming system called the Squeezebox Duet, which has been well reviewed.

My guess is that streamed music in the home will eventually become ubiquitous and subscription music will then stand a chance of hitting the mainstream (and perhaps saving the music industry). Until then, I think it will face a struggle.