by Â Paul Resnikoff
Sony Music is now preparingÂ aÂ massive, company-wide shift towards Hollywood-style â€˜windowing,â€™ according to a bombshell statement by Sony Entertainment CEOÂ 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. Â But theÂ music industry rarely windows at all, while mostly giving everything away for free from day one.
Now, thatâ€™s about to change: in an interview at the tech- and media-focused Re/Code, Sony Entertainment chiefMichaelÂ 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. Â â€œWe all see the business is moving downhill; the download business is declining quarterly,â€ Lynton told Re/Code journalist Peter Kafka. Â â€œThe kind of a service that we would like to see, going forward, is a subscription service.â€
â€œSo youâ€™re going to first hear the music in a subscription service, and then later in a free service, rather than the other way around.â€
Hereâ€™s the discussion portion that delves intoÂ windowing strategies ahead:
Peter Kafka (Re/Code): So right now I can get free on-demand music, just aboutÂ anything I want on YouTube and Spotify. Â Iâ€™ll have to watch an ad or two periodically, or listen to an ad periodically â€”
Michael Lynton: Yes, yes.
Kafka: So when does that stop?
Lynton: Thatâ€™s a good question. Â I think it stops probably when you get over a â€” I donâ€™t want to say the number, butâ€¦ many, many-fold bigger than what we have in the current paying subscription world. Â So, you have twenty â€” what is it? â€” seven million subscribers who are paying in Spotify right now â€”
Kafka: I think theyâ€™ve announced 25, yeah.
Lynton: 25 thereabouts. Â And youâ€™ve got, I canâ€™t remember exactly the number thatÂ Apple has â€”
Kafka: 10 million there.
Lynton: 10 million. Â Youâ€™re going to need multiples of that before you are gonna turn off, in my opâ€“
Kafka: Oh, so your idea is letâ€™s keep free going until we raise the number of subscribers and then turn it off â€”
Lynton: You might see it come sooner, but my suspicion is you wonâ€™t until you get to a â€”
Kafka: I think the perception was you guys were saying well letâ€™s turn off free so people will have to goÂ buy the stuff, but youâ€™re saying, flip it around â€”
Lynton: Well I think what theyâ€™re going to wind up doing is ultimately, what we started the conversation with. Â Theyâ€™re going to window. Â So youâ€™re going to first hear the music in a subscription service, and then later in a free service, rather than the other way around.â€