“Rhapsody. Napster. MOG. Rdio,” Ed Bott reports for CNET. “What do these four music subscription services have in common? Each company survives on monthly subscription revenues. Each one has an iPhone/iPad app that is prominently featured on its home page. Each one offers a free trial that they hope you’ll love and that you’ll convert to a paid subscription when the trial runs out.”
“And under Apple’s new subscription rules, each one will soon be forced to start paying 30% of its revenue for each of those easy, one-click subscriptions it gets through an app on an Apple device… Yes, Apple says it won’t take a cut if you place your order elsewhere. But they’ve made it inevitable that most of those subscriptions will come from the app,” Bott reports. “In short, each of those four services has just been torpedoed by Apple. Each one is taking on water. The question now is deciding in what order they go under.”
Bott reports, “Profit margins in the music business are awful. Even if one of these companies can figure out a way to make a decent profit after paying its 30% Apple tax, they’ll never survive the second direct hit they will take when Apple brings out its own service, integrated with iTunes.”
Read more in the full article here.
[Thanks to MacDailyNews Reader "GetMeOnTop" for the heads up.]
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