While digital sales are growing - from $79m to $105m between 2009-10, according to ARIA - they are not growing fast enough to make up for declining physical sales, which dropped from $377m to $279m in the same period.
Samsung Music Hub and the recently launched Sony Music Unlimited are attempts to mimic the highly successful iTunes platform, which has helped spur on sales of all of Apple's devices. Samsung hopes that providing an easy, integrated way of obtaining content for its devices will benefit it in a similar way.
But John Watson, the prominent band manager for Silverchair, Missy Higgins, Cold Chisel and Pete Murray, amongst others, said it was "too early" to know whether there was a "genuine business model" for artists in any online subscription services.
"It's certainly too early to try to pick the likely 'winners'," he said in an email interview with Fairfax Media, publisher of this website.
"Income [for artists] from these services is still very small and there are still some outstanding issues about how to divide that revenue fairly between artists and labels," he said. "However, the much bigger battle is to get to a place where more consumers are actually willing to pay for music in one way or another."
Regardless, Mr Watson said services like Samsung's Music Hub, Guvera and other streaming music apps like Sony's Music Unlimited and Anubis.fm were all "potentially welcome additions to the music landscape".
For $9.99 Music Hub on the Samsung Galaxy S II smartphone offers access to three million songs. For a bit extra, $14.99, you can get access to music videos on a web browser and on smart TVs, home theatre and Blu-ray devices.
Dan Rosen, chief executive officer for the Australian Recording Industry Association (ARIA), which represents the recording industry, and also CEO of the Phonographic Performance Company of Australia (PPCA), which collects money for artists, welcomed Samsung's Music Hub.
Roddy Campbell, director of new channel development at record label EMI, said that the Australian digital market was "very much in need" of new services. "It's still growing at a good rate; we're 30 per cent up across the board last year in terms of digital sales. But I think the growth is really going to accelerate further as consumers migrate to a whole load of new ways of consuming music."
Subscription-based streaming music on the internet was attracting "a lot of followers" in overseas markets, Mr Campbell added. "So all of our focus is on that at the moment and we think Samsung has the potential to deliver something really game-changing in the local market. Our biggest challenge every day is to find new ways to make it easier for people to consume music. So we think that [Samsung's Music Hub] gives that to Australian consumers."
The launch of the new service comes as JB Hi Fi recently announced that it too would launch a subscription-based music streaming service in the second quarter of the 2012 financial year. JB intends "to have between 6 to 8 million tracks from 100,000 artists at launch". Its service will allow for unlimited access and listening to music from a Mac, PC or mobile device, according to CEO Terry Smart.
Music Hub was unveiled at an event last Thursday night in Sydney featuring bands Faker and The Potbelleez. Solo artist Pete Murray was also there, as was dance singer Zoe Badwi. Former Australian Idol presenter James Mathison hosted the event and boasted about the new service, which Sony, Warner, EMI and Universal have all signed up to, meaning at launch there will be three million songs available and 11,000+ music videos.
It will initially be available from October 17 on the Samsung Galaxy S II smartphone, which is a direct rival to the iPhone. From November 1 Samsung's Galaxy Tab 7" will also get access to the service, as will other Galaxy Android v2.2 devices and higher. Come "mid-December" web browsers and Samsung smart TVs, smart home theatres and smart Blu-ray devices will also get access.
It's important to note, however, that the $14.99 "premium" plan will be required for access on a web browser and on smart TVs, home theatre and Blu-ray devices. The premium plan gives access to the Music Hub on four devices and a web browser. It is what allows access to music videos on web browsers, smart TVs, home theatres and Blu-ray devices.
The entry-level $9.99 plan will get you access to the Music Hub on either a smartphone or tablet. That plan will also allow access on multiple smartphone or tablet devices, although only one device can be logged in at time according to Samsung Australia's vice president of telecommunications, Tyler McGee. It will only offer music - not music videos.
Asked whether Samsung's service would attempt to gain market share from Apple's iTunes, Mr McGee said he "wouldn't try to compare" what Samsung was offering to what Apple had in the marketplace. "I think our offering is very different to what they're offering."
Music is streamed at 128kbps on Music Hub - standard for most MP3 downloads - and the streaming music is protected by the record labels with digital rights management (DRM) so you can't copy it onto other devices. You can, however, download an MP3 using Music Hub for $2 and copy it onto whatever you like without DRM, EMI's Mr Campbell said.
The smartphone version of the app will allow caching of up to 500 songs, meaning even if you don't have access to the internet (say on a flight) you can still listen to music. "We think 500 is sufficient based on the capacity of most devices and based on people's music taste," EMI's Mr Campbell said.
He said the number of songs initially available - three million - would increase "week by week" as independent labels were added. "So it could well be double that by Christmas."
It's unknown whether Samsung will launch the Music Hub on its latest tablet, the Samsung Galaxy Tab 10.1, in Australia due to an ongoing battle in the Federal Court in Sydney. Apple claims Samsung's tablet "slavishly" copied its iPad and is seeking an injunction to prevent it from going on sale in Australia.
While both parties wait for the judge presiding over the case to make a judgment on the injunction, expected this week, Samsung has agreed to hold off on selling the device. So as to whether the Music Hub makes it onto that tablet is still unknown.
From January 1 all new and existing Samsung Galaxy smartphone and Galaxy Tab customers will receive a one month free trial mobile level subscription to test out the service.
First impressions of a beta version of the software on a Samsung Galaxy S II smartphone by this reporter indicated it was still very buggy. However a spokesman for the company said bugs shouldn't be expected on October 17, when it launched officially.
Source : http://english.kompas.com/read/2011/10/12/01544499/Online.Music.War.Samsung.Vs.Apple
