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May 25, 2005
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Om Malik on Yahoo! Music
Om Malik discusses the Yahoo! Music business model (The Yahoo Music Business Model). His conclusion? They might be able to make a profit through advertising if the subscriptions are free.
Hypothetical scenario: what if Yahoo turned this into a free service, and decided to eat all the costs, that is $4.50 a month – within days it would have more than 20 million users who will sign-up. $6.50 a month of advertising minus the costs of $4.50 every month, on every user means $130 million a month or $1.56 billion a year. Even with costs hovering around $1.08 billion, Yahoo could make some serious cash here. Has the record industry hoisted by its own petard? [emphasis in original]
While I'm not sure that this model would actually work, the fact is that the extremely low price model changes the game significantly. It isn't quite there yet, but I think we can begin to see light at the end of the internet music tunnel.
posted by Ernest Miller |
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Ernest Miller pursues research and writing on cyberlaw, intellectual property, and First Amendment issues. Mr. Miller attended the U.S. Naval Academy before attending Yale Law School, where he was president and co-founder of the Law and Technology Society, and founded the technology law and policy news site LawMeme. He is a fellow of the Information Society Project at Yale Law School.
Ernest Miller's blog postings can also be found @
