Unlimited Free Music Is About to End, Sony CEO Says

Sony Music is now preparing a massive, company-wide shift towards Hollywood-style ‘windowing,’ according to a bombshell statement by Sony Entertainment CEO Michael Lynton.

Virtually all Hollywood releases march through a windowed release cycle, starting with higher-generating outlets like movie theaters, and ending with lower-revenue spots like Netflix.  But the music industry rarely windows at all, while mostly giving everything away for free from day one.

Now, that’s about to change: in an interview at the tech- and media-focused Re/Code, Sony Entertainment chief Michael Lynton pointed to windowing as a broader industry response to tanking revenues, and a solution for both Sony Music and other major music content owners.  “We all see the business is moving downhill; the download business is declining quarterly,” Lynton told Re/Code journalist Peter Kafka.  “The kind of a service that we would like to see, going forward, is a subscription service.”

“So you’re going to first hear the music in a subscription service, and then later in a free service, rather than the other way around.”

Here’s the discussion portion that delves into windowing strategies ahead:

Peter Kafka (Re/Code): So right now I can get free on-demand music, just about anything I want on YouTube and Spotify.  I’ll have to watch an ad or two periodically, or listen to an ad periodically —

Michael Lynton: Yes, yes.

Kafka: So when does that stop?

Lynton: That’s a good question.  I think it stops probably when you get over a — I don’t want to say the number, but… many, many-fold bigger than what we have in the current paying subscription world.  So, you have twenty — what is it? — seven million subscribers who are paying in Spotify right now —

Kafka: I think they’ve announced 25, yeah.

Lynton: 25 thereabouts.  And you’ve got, I can’t remember exactly the number that Apple has —

Kafka: 10 million there.

Lynton: 10 million.  You’re going to need multiples of that before you are gonna turn off, in my op–

Kafka: Oh, so your idea is let’s keep free going until we raise the number of subscribers and then turn it off —

Lynton: You might see it come sooner, but my suspicion is you won’t until you get to a —

Kafka: I think the perception was you guys were saying well let’s turn off free so people will have to go buy the stuff, but you’re saying, flip it around —

Lynton: Well I think what they’re going to wind up doing is ultimately, what we started the conversation with.  They’re going to window.  So you’re going to first hear the music in a subscription service, and then later in a free service, rather than the other way around.”

13 Responses

  1. Anonymous

    Sony supports rapists and abusers, so I could give a shit about their vision of the future. cc: Dr Luke / R Kelly / Chris Brown

    • Anonymous

      Dr. Luke is a beloved man of Doug Morris the mummified believer in 900,000,000 credit cards in Apple files becoming a Jesus Christ of the music industry! Sorry Apple on Spotify DOPE is just SPOOFY!

      • Remi Swierczek

        It’s my comment!
        By the way Lucian Grange is also prematurely mummified!
        Let’s build pyramids – it might cleanse music industry.

    • Rick Shaw

      Alleged rapist. Let’s not get ahead of ourselves. Innocent until proven guilty.

  2. FarePlay

    This is the way forward. Stop asking and start doing. This goes for you indie guys as well. Just because there’s a group of highly vocal individuals who proclaim the music business will die if we try and return it to a business where people actually pay for recorded music, it is the only path that doesn’t terminally marginalize the value of music and an artists ability to make some real money and not chump change.

    As it is, with the exception of a handful of success stories, people who are talented enough to have a career have little chance of earning enough money to have one.

    There is a basic economic problem for artists. Our inability to take the necessary steps to deal with rampant, global piracy and an inability to be forward looking in the deals artists and their representatives make with technology.

    Spotify doesn’t need every title to succeed, they just need to figure out how to convert listeners to subscribers.

  3. Serge

    How is that relevant?

    Luke is an “alleged” rapist and abuser.
    Innocent until proven guilty.

    And still irrelevant to this issue.

    • Anonymous

      Not irrelevant at all to say the opinions of those like sony who support proven rapists and abusersshouldnt carry any weight, no matter the subject

  4. Versus

    This is a step in the right direction, but only as part of a broader stronger strategy:
    – DRM for downloads
    – higher payout rates (statutory rates) for streaming
    – real crackdown on piracy

  5. DDD

    Sony is nothing more than a music museum and this Lynton character is so painfully out of touch it’s almost like a comedy sketch. Their ancient distribution system was built on a product based business model in a world that no longer requires it. if they want to be part of the conversation maybe they should start by disclosing how much $ they received from Spotify to access their catalogue and exactly where that cash went?

  6. Skip BayLess

    This guy sounds/looks like shit. He does not care what happens to the business of music in anyway. he could not even give a specific number on how many subscribers Apple/Spotify have. He is the wrong guy to have overseeing the Music business at Sony. Look at what the other music companies are doing. Universal/Warner. They are being aggresive in their approuch when it comes to finding a stable income model for the business. Sony music is a shell of itself. When you have ppl like him at the top, its easy to see why. No Passion/Enthusiasm

  7. Ready set stream!!!

    The music business will rarely disclose what advances they received (and/or) audit settlements since they hold those funds to offset the fact that their business is dying. If they let you in to audit…It’s the circle of music business life and this record is played over and over…again and again. Out of millions of songs they have in their catalog, the major’s are fully aware which artists matter and who doesn’t…and for those on the wrong side..oh well. As a user I am still a huge fan of streaming and it has change my music listening.

  8. Rick Shaw

    Sony is not living on the same planet as the rest of us on this issue.

  9. Mojo Bone

    Here’s a stock tip; based on these comments, I’m short Sony. Wait and see what happens to windowing, as soon a data compression and internet bandwidth start putting Hollywood out of business.