New Record Label: Starbucks
Does Apple's iTunes hold the key to the future of music distribution? Or does Starbucks with its Hear Music burning stations? Jason Tan gave us three considerations: 1. Music from...
2. Record labels hate the blanket 99 cent per song pricing model of iTunes. They believe that they are getting short-changed so that Steve Jobs can sell more iPods. Starbucks, which now exclusively sells rare Bob Dylan songs and songs from its own signed artists, does not have to deal with this. Starbucks not only has more control over pricing, but with distribution as well. Pretty soon, smart record labels (i.e. the small ones) will realize this. Musicians will start seeing this too and will also build record labels based on the Starbucks model. Music will be price-segmented into premium designer music and deeply-discounted commodity pop music (Wal-Mart music store?).