BBM Music change in strategy August 31, 2011

Music Industry

RIM recently announced a new cloud service to lure music enthusiast to use BlackBerry mobile devices.  In part this is an attempt by music industry to make up for lost revenues.  Current trends for CD sales are down ~13% as mentioned in article from artistpr.com website.  People are opting to go with direct streaming services such as Pandora, Spotify and iTunes.  Not to mention another announcement by Facebook looking to also get into social music as a move to create communities of music lovers.  The music industry deals with service providers represent new channel to market for the big players in music since they do not have the capabilities to create such services.

BBM Music Service Comparison

The new music service offer by RIM provides $4.99/month allowing up to 50 songs.  The one advantage is the people can listen to friends music as well.  So in theory the more friends I have that use the BBM Music service the more songs I can listen, leading to a network of music, potentially up to 50 x N friends of music.  Does not appear to be any limit on number of friends to listen music from.  This presents a social networking environment targeting some of the more younger generation.  For young people this is a great service to start off with especially if you have a large social network of friends to share with.  Recent trends in BlackBerry OS show demographics changing towards younger generation as shown from comScore diagram.

RIMs Drive for Younger Users

BBM Music service will have serious issues when competing against music enthusiast who already have a stockpile of music (1000′s songs).  Service offered by Amazon looks more appealing giving people access to thousands of songs for just $5/year.  While iTunes is providing a matching service that does not require uploading your songs, if the same song exists in iTunes then people have access to the same song even if the sound quality is better for just $25/year.

I do not want to rain down on RIM (considering they are canadian, hey!), certainly a good attempt to lock in younger generation with limit cash to spend.  But as the user grows and wants to expand their music collection this will be difficult considering the 50 song limit.  From the get go this service will be under tough competition, but I do see some possibilities for RIM to expand the service by providing incentives to link other BBM services together with music.  Another crazy idea to promote social music is by increasing monthly song limit base on number of social music friends in your network.  So for example say I like top 40, pop, rock and jazz categories.  By creating a social network of friends that exceed 20 friends I would get 5 more songs allowed in my monthly limit.  Doubling this to 40 friends gives 10 more songs, get it.  Only time will tell, but hopefully this service will improve over time.