Finally we get to see some fruits of the labour of the protracted negotiations between the UK music industry and the ISPs.  Sky’s long mooted service – Sky Songs – will go live on the 19th October with content from all the majors, powered by Omnifone  In doing so Sky brings three major assets to the table:

  • a scale of marketing clout and expertise that other music subscription services could only dream of
  • proven and deep understanding of packaging and marketing entertainment products
  • a large installed base of premium customers to target


At launch the service is to be marketed to all UK broadband customers rather than explicitly to Sky customers. This gives a wide addressable market, but it does mean that two other key assets are currently untapped:

  • bundling this offer with Sky TV packages
  • integration with Sky’s hardware


Sky does though, leave these as distinct possibilities on the road map, which is very wise as they could prove to be the secret sauce that could make Sky Songs a success.


Sky also do one other very smart thing that will stand them in good stead: they enable customers to ‘dip in an out’ rather than locking them in to a year’s commitment.  This is added to competitive pricing:


  • pay £6.49 and download either a £6.49 album or 10 songs, and receive unlimited access to listen to over four million songs online for one month; or
  • pay £7.99 and download either a £7.99 album or 15 songs, and receive unlimited access to listen to over four million songs online for one month.


I can’t emphasize enough how important the ‘dipping in and out’ should prove for Sky Songs.  UK and other European consumers have proven largely unwilling to pay premium subscriptions services and even in the US no premium music subscription service has broken the 1 million subscribers mark.  Napster’s recent price slashing is indicative of the challenges facing the incumbents.  The bottom line is that most music buyers don’t spend the amount of money that a monthly subscription fee is equivalent to, however good value for money it might be.  The annual cost of Sky Songs would be £79 or £96. By way of comparison per capita annual music spend in the UK is just £2 whilst the average spend per UK music buyer is closer to £6.  And the unlimited streaming part isn’t that much added value anymore: Spotify’s UK success has made free streaming table stakes, not a premium add-on.


All of which is why Sky’s decision to allow customers to effectively use the service as a good value a la carte album purchase with free streaming is so smart.  But I hope they’re similarly smart to market it that way as they educate the customer base.  Sky almost single handedly educated the UK market about the concept of TV subscriptions, now they need to do the same for music subscriptions. 


Music subscriptions looked like a dead man walking in 2008, but over the last couple of years the space has had new life breathed into it with a series of next generation iterations, including:

  • Nokia’s Comes With Music
  • Spotify Premium
  • Virgin Media’s Unlimited MP3 service
  • Datz Music Lounge
  • Music Station
  • Sky Songs


All of these differ markedly from each other, and that is exactly the point.  The days of the 9.99 rental streams as the future of subscriptions are gone.  The mantra of one size does not fit all applies keenly to the music subscription space.


This isn’t to say Sky Songs will be an instant run away success – it will probably spend a while fine tuning its proposition and positioning – but once it starts leveraging all of its assets it stand as good a chance as anyone of making the model work.  Perhaps most importantly, it heralds a crucial shift in the role of ISPs from fat pipes for illegal downloading to conduits for premium revenue.  The outflow of industry value down the ISPs pipes might finally be changing course to a partial inflow of value.


Forrester has recently published a report on ISP music services.  Clients can read it here.