Music as DSL Subsidy, and Cuffware
French ADSL operator Neuf Cegetel has turned platform, recruiting Universal Media as a partner in its new music service.
For €4.99 a month over and above their usual €29.90 triple-play tariff, you can download as many songs as you want from the entirety of Universal's back catalogue. A less extensive service is free. It's clear what Neuf Cegetel is up to, right? Facing the usual DSL operator's struggle to survive incumbent competiton, they're adding new revenue-generating services that cross-subsidise the ISP operation. And, as usual, one of the simplest ways to do this is through platforms and partners.
One wonders how, exactly, Cegetel will deliver the music; after all, they do have a reserved path into your home for their cable TV service, which sounds like a cunning way to handle it with guaranteed QoS. But there are some reasons to suspect that they may not succeed. For a start, all the music is subject to digital rights management, and users must log in once a month; or lose all the music they downloaded. Equally, should they ever churn elsewhere, all the music vanishes. Well, you can see their rationale; it is, after all, a cross-subsidy to the ISP operation, and Universal Music will probably have demanded DRM as a condition of their participation.
But there's no way this will be popular. Especially not as it's only open to Microsoft Windows users. And the timing is curious; this comes just as EMI has started offering DRM-free downloads as a premium service. They claim that they're a big hit; so much so, that another company is experimenting. Its name? Universal Music.