Sony's Music Pass: An easy way to combat declining CD sales?

Posted Sep 12th 2008 2:08PM by Richard Driver
Filed under: Products and Services, Consumer Experience, Apple Inc (AAPL), Marketing and Advertising, Sony Corp ADR (SNE), Tech for the Rest of Us

It's been almost a year since Sony Corporation (NYSE: SNE) launched the music downloading platform Platinum Music Pass in direct competition with Apple Inc. (NASDAQ: AAPL)'s iTunes Store, the largest and most successful downloading store. In the months since the program was announced and first released, it has not been reviewed very favorably. Nevertheless, this user found it very exciting and an inventive way to combat declining music sales based on CD profits and the strong grip store's like iTunes have on the market.

When it was released, critics and industry "pros" derided the credit card-like download albums as a step backward (you could easily download an album from iTunes without the cards), overpriced (the set price of the cards is $12.99), and a complete misstep in a market and economy obsessed with environment-friendly products (the cards are only available from physical retailers). Nevertheless, and these problems aside, the cards do offer those music listeners who are shopping for groceries or out buying other goods the chance to buy a downloadable album without the hassle of the CD.

Critics overlooked the mass appeal and sale capability of the cards in grocery stores and other stores since the target groups are not listeners who go out to simply buy an album, etc. Additionally, the platform only offers music from Sony's artists, which limits its catalog capabilities, but it does offer the highest quality MP3 tracks at 320 kbps MP3. By comparison iTunes's music files are generally 128 kbps in the regular store and 256 kbps in the iTunes Plus store.

With Sony's recent buyout of the Bertelsmann Group's half of Sony BMG Music Entertainment, it is unknown at this time whether the card program will continue, but new albums were still being released from the program in July when rumors about the buyout emerged. Aside from the buyout, investors should be interested in these programs because whether they are successful or not they are another attempt by management and advertising firms to reinvigorate the music industry and sell it in new ways to new audiences. Clearly the program is not intended for those music listeners who need immediacy or direct access as soon as an album is available. However, those listeners and the general public can enjoy the program because it is widely available and does not require the space CD racks are often allotted.

Nothing it seems will completely topple the iTunes-model and control of the downloading market, but if this type of program can find a larger appeal and attract new customers to the market then it is successful in some degree. In the end though, the download cards are probably more indicative of the continued failure of physical formats since it still requires a physical component before the downloading can begin.

Tags: AAPL, iTunes, music industry, MusicIndustry, platinum music pass, PlatinumMusicPass, SNE