The open music model is an economic and technological framework for the recording industry based on research conducted at the Massachusetts Institute of Technology . It predicts that the playback of prerecorded music will be regarded as a service rather than as individually sold products , and that the only system for the digital distribution of music that will be viable against piracy is a subscription -based system supporting file sharing and free of digital rights management . The research also indicated that US$ 9 per month for unlimited use would be the market clearing price at that time, but recommended $ 5 per month as the long-term optimal price.
7-459: Since its creation in 2002, a number of its principles have been adopted throughout the recording industry, and it has been cited as the basis for the business model of many music subscription services . The model asserts that there are five necessary requirements for a viable commercial music digital distribution network: The model was proposed by Shuman Ghosemajumder in his 2002 research paper Advanced Peer-Based Technology Business Models at
14-426: A service being provided by the industry, with firms based on the model serving as intermediaries between the music industry and its consumers. The model proposed giving consumers unlimited access to music for the price of $ 5 per month ($ 8 in 2023), based on research showing that this could be a long-term optimal price, expected to bring in a total revenue of over US$ 3 billion per year. The research demonstrated
21-469: Is because DRMs haven't worked, and may never work, to halt music piracy. – Steve Jobs , Thoughts on Music open letter, 2007 Comparison of on-demand streaming music services The following is a list of on-demand music streaming services . These services offer streaming of full-length content via the Internet as a part of their service, without the listener necessarily having to purchase
28-519: The MIT Sloan School of Management . It was the first of several studies that found significant demand for online, open music sharing systems. The following year, it was publicly referred to as the Open Music Model. The model suggests changing the way consumers interact with the digital property market: rather than being seen as a good to be purchased from online vendor, music would be treated as
35-520: The current law-enforcement based methods used by the recording industry. One startup in Germany, Playment, announced plans to adapt the entire model to a commercial setting as the basis for its business model. Several aspects of the model have been adopted by the recording industry and its partners over time: Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer
42-504: The demand for third-party file sharing programs. Insofar as the interest for a particular piece of digital property is high, and the risk of acquiring the good via illegitimate means is low, people will naturally flock towards third-party services such as Napster and Morpheus (more recently, Bittorrent and The Pirate Bay ). The research showed that consumers would use file sharing services not primarily due to cost but because of convenience, indicating that services which provided access to
49-403: The most music would be the most successful. The model predicted the failure of online music distribution systems based on digital rights management . Criticisms of the model included that it would not eliminate the issue of piracy. Others countered that it was in fact the most viable solution to piracy, since piracy was "inevitable". Supporters argued that it offered a superior alternative to
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