Sony Entertainment CEO suggests a new music biz model

Mr. Lynton predicts the music business will one day borrow from the approach film studios have used for years to release movies — a system known as “windowing,” where consumers who want immediate access to the latest works pay more than those who are willing to wait for it.

“Going forward, you will see some version of windowing in the music industry,” Lynton said Thursday at the Code/Media conference at The Ritz-Carlton, Laguna Niguel in Dana Point, Calif. “We all see the business is moving downhill; the download business is declining quarterly. The kind of a service that we would like to see, going forward, is a subscription service.”

Music subscription services like Spotify and Apple Music (with 25 million and 10 million subscribers, respectively) will need to reach more people than they do now. But at some point, subscription services will account for a large enough share of the audience to get a first crack at newly released music — and they’ll also play a role in marketing and promotion.

Songs will eventually trickle down to free services, where the payoff for music labels is less rewarding.

Such an approach would prop up the growth segment of the industry — streaming — and likely spur sales. It might also address the industry’s frustration with YouTube, which the RIAA says generates less revenue for the music companies than do vinyl record sales, despite accounting for billions of video views.

Source: Recode