Mike Bebel, who has worked with Napster (NAPS) and Universal Music Group, is testing out a new business model for the download music space. He is running the fairly new download service called "Ruckus" that will offer all the music and movies they want for free while they're in college, and then once out of college, requiring a fee to continue.
Starting today (January 22), Ruckus is enlarging its base by allowing anyone with a valid ".edu" email address to access the service and the online community built around it.
The strategy is that when the student is out of school, and no longer has the "edu." extension, they will either have to drop the service altogether, or pay $8.99 a month to continue. If they want to have their songs tranferred to their portable music device, they'll have to pay an additional $4.99 a month.
The business model has attracted the interest of the music industry (along with investors), who are starting to finally focus on where they need to go rather than sue or harass everyone.
"It has taken a bit for (the music industry) to get comfortable with the notion of it being free and being ad-supported," says Bebel. "But now there is recognition that the piracy problem is not going away and further recognition that a lot of this is happening on college campuses."
Bebel added that ads are not attached to songs and that advertising will not have to be viewed before songs while waiting for the song to play.
It's good to see the industry trying to find solutions, which some in the industry are increasingly pushing, rather than defend their old business model.
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