Are Subscription Music Services Better for Indie Labels Than For Mainstream Ones?

I recently wrote about how radio aggregator apps are competing with subscription music services like Spotify and Pandora.On the same day, Robert Andrews of paidContent wrote about Drip.fm, a subscription service that lets listeners subscribe to independent labels, instead of artists or genres. The service seems to particularly popular among indie music fans, even though the labels seem to release “just a few, hand-picked tracks each month.” Listeners can choose to subscribe to more than one label, all at varying prices.This is a similar model to the magazine industry’s Next Issue platform, which has had mixed results. However, unlike NextIssue, which is trying to target mainstream magazine consumers, Drip.fm looks like it’s aiming to be a smaller platform catering to the indie crowd, a market known for its anti-commercialism sentiment.Encouragingly for Drip.fm, indie labels seem eager to join; but it remains to be seen if consumers will get on board at a rate that allows the company to break-even. Hopefully, Drip.fm won’t be in the same situation as Wahwah.fm, which recently had to shut down its operations.Since most listeners use terrestrial radio to discover new music, Wahwah.fm’s model seemed ideal — provide Internet-based streaming radio, but no on-demand or interactive playlists — much like terrestrial radio. In turn, the company would pay lower royalties. But Wahwah.fm had to shut down, to some extent because they couldn’t drive the audience to the service, but also because the company had to constantly renegotiate with labels and collection societies about royalties.Needless to say, the online music industry is the most volatile of all the paid content arenas we cover. If you’ve got a good idea to getting thisĀ  niche back on track to profitability, let me know. I’d love to hear it.

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