“Virgin Group is set to announce a partnership with Internet developer MusicNet today to build the retailer’s online music store. The Virgin site, which will launch in late summer, will try to differentiate itself from the myriad of other stores by offering a monthly subscription plan that, for less than $10, will let users listen to as many songs as they like,” Stephen Lynch reports for The New York Post. “If the subscription is canceled, those songs will no longer be accessible – although users will also have the option of buying music permanently.”
“The Virgin store will use Microsoft’s digital-music format, WMA, which is backed by online retailers such as Wal-Mart and Napster. The leading online music store, iTunes, uses a competing format from Apple,” Lynch reports. “Zack Zalon, president of Virgin Digital, said the large number of digital-music devices backing WMA will give it an advantage over iTunes, which interacts with only one player, the iPod. ‘We believe Microsoft will eventually define the standard,’ Zalon said. ‘Apple is an innovator, but, because it has a closed standard, it will fall off.'”
Full article here.
MacDailyNews Take: You can start laughing now, if you’re not already. Subscriptions? Failed idea. WMA is not a “closed standard?” Apple will “fall off?” You mean like Napster 2.0, BuyMusic.com, etc. fell off or are currently in the process of falling off the map – pushed by iTunes, no less? Mr. Zalon overlooks the simple, usually-easy-to-comprehend fact: millions of iPods sold and millions selling right now means those millions of iPoders will not be using Virgin’s “service” if and when it ever becomes available in August. We’ll be using iTunes and Apple’s iTunes Music Store. Bigtime. So will HP iPoders. Give us a call when you’re not just peddling vapor and FUD, Mr. Zalon.
>> the large number of digital-music devices backing WMA will give it an advantage over iTunes, which interacts with only one player, the iPod.
If everyone is clamoring for an iPod as the digital music device of choice, who cares if there are a hundred WMA devices on the market? It’s irrelevant! One device with 70% of the market or 50 devices fighting for the other 30%?? It’s the player that is determining market success, not the format. And iPod is THE player!
After 5 million iPods (which is fast approaching) AND how in the world would THAT figure make it a niche player?
Fact is others d/l service are simply vanishing. How could you become a niche player when other players (literally) are lost in a drawer and no one use them to buy music?
Virgin “will try to differentiate itself … by offering a monthly subscription plan”
What balls! Is it Stephan Lynch who would make such a stupid statement, or some Virgin PR exec?
As for Apple’s system being closed, that is correct. You can talk about AAC being a standard available to everyone, but Fairplay is not available to everyone. iTMS tunes play only on iPods–it’s closed and that’s exactly what Apple intended. I doubt they will license Fairplay to anyone in the near future.
Not only that, but I agree with them. iPod owners have a great place to buy music. iTMS is one of the things that makes owning a iPod so great. Why endanger the success of iTMS by giving other online companies access to iPod business?
Licensing Fairplay to player manufacturers would be even worse. It would be giving away one of iPods big advantages–access to iTMS.
In the end, Apple will license WMA for use on iPods (or perhaps an iTunes WMA-to-AAC function) to make the iPod more flexible, but I doubt they will ever license Fairplay to anyone–it wouldn’t benefit Apple at all.
iTMS is not the thing to beat, the iPod is. If Virgin came out with an iPod killer then maybe. They can tie it in with their phone brand and maybe make money that way – but kill iTunes, no way.
this is hilarious..
I love richard branson, man, but.. he has no ‘balls’ coming out and doing exactly what you know MS is going to do in a few months… buying music over the phone..? wow that’s amazing… totally outrageous, but technically feasible!
It’s only a matter of time before people want to do that…*sarc
it’s like an arranged marriage of customer and technology…””you will love your portable media device….in time”
lmfao
why would anyone want to use anything other than itunes…
oh yeah.. since when does Virgin know any more than Apple about software?
Probably opening with microsoft money?
This is pretty funny. All these brain-dead “suits” rushing into a money-losing business. It’s like the “dot-coms” all over again. What none of these dweeboids seems to understand is that Apple makes money on the HARDWARE (the iPod); not the SOFTWARE (the iTMS).
I don’t see this as a paticularly frightening intervention. The success rate of virgin businesses is lower than Apples market share of the computer market with the phones business being the only relative success in recent years indeed since the airline which itself was only kept alive by the selling of the original music business (and much else) but presently pretty much keeps everything else alive, if not exactly kicking- butt anyway. Branson’s business might be a minnow compared to Enron’s but the hype around its performance leaves even it in the shade.
1) As reported elsewhere, the underlying tech in the iPod has the ability to play WMA, Apple just has it turned off. If at any point Apple feels they need to add wma, they can just turn it on (and probably pay Microsoft the liscense fees). So Apple is in a much better position then the strictly wma folks, Apple is ready for whatever happens. The iPod/iTunes/AAC continue to dominate, the others are screwed.
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2) Apple is also positioned well if the subscription service style thing becomes at all popular. They have been streaming stuff for years, have the technology and partnerships to do it. They have the infrastructure to do subscription billing. Radion is already built into iTunes, they can again just throw a switch and be competing.
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The thing to be careful of though is that so far the whole game has been centered here in the USA. The rest of the world is a whole different ballgame. Apple won’t be starting over but they have less of an advantage unless they can really get launched and out-market the others worldwide.
Want to know what KennyLucius predicts? Okay, since you asked so nicely, I’ll tell you.
Three years from now:
1) iPod will hold 20% of the marketshare, 35% of the user base for digital music players.
2) There will be 3 online music sellers: iTMS, Microsoft, and one other WMA-based seller.
3) iTMS will hold 50% of the online market share because iPod owners are more likely to pay for their music than the Walmart shoppers who buy other brands of music player.
4) Fairplay will work only with iTMS and iPod. WMA playback will be enabled in iTunes/iPods. No one will care that Fairplay is closed–they’ll be too busy explaining why XP is so wide open and Longhorn has slipped again.
I agree with a previous poster. At some point Apple are gonnna have to license Fairplay or allow WMA support. The market is jus too big for one player to control both the hardware and the format, exclusively. If Apple goes down that road for ever then Sony, Virgin, etc. etc. etc. etc. x 100 will all use WMA and M$ DRM and out compete Apple on the Music Store front too. I would suspect that Apple are currently building a head of steam behind Fairplay licensing ….
A subscription based service COULD work, but it would have to be at such a low price that no one would make any money. The path to the top of the mountain will be littered with the bones of companies like Virgin Digital.
These efforts fall in the category of ‘if it happens for 5 years it is on a permanent vector to infinity’. Like the people in 1900 who predicted the amount of horse droppings on the streets of New York in the year 2000.
They don’t understand WHY the wintel world is still dominating, so they can not infer why it wouldn’t, even with evidence to the contrary. It’s like watching people still buying into the stockmarket after the bubble, and afterwards when their money is gone they grab you and say “My stocks could go DOWN!! WHO KNEW!!?”
The fact that Apples product offerings, along with a good head start, could get it right, and that Microsoft might get it wrong and fail is as unlikely as the sun rising in the west. Scratch the ‘head start’ line. Apple walked into a stalled, logjammed, market and made it HOT. For awhile anyway, until more companies dump money into bad plans, and realize that just selling songs has a razor thin profit margin. Between free GREAT software like iTunes, a killer website (ITMS is not really a website, what Is it?) and a must-have mp3 player, APPLE has it nailed. Imagine Dell, or Gateway, or ANYBODY winning that Trifecta and being a serious contender.. I can’t.
(continued in next post)
(and the RANT goes on)
Actually, the only real threat (if that’s the right word) is the REST OF THE WORLD. Apple can sell more and more computers every year, but it’s ‘market share’ will drop if more PEE-SEAS are sold in Vietnam or Panama.
No offense meant, a low budget means you buy the cheapest, even if in the long run it costs more. I just don’t see a poor village in China buying an iMac over an eMachine for it’s library or government offices.
The same sort of thing can happen with music. Because after your local Chinese library gets an eMachie, the kids are going to want to buy tunes. And get the cheapest player they can afford.
I believe that this ‘globalization’ of computers is what’s costing Apple ‘marketshare’. For the people buying PEE-SEAS in the third world, Apple computers are not a choice. I know so many people who are switching or who have switched, that my jaw hits the floor when I hear how ONCE AGAIN Apple’s marketshare has dropped.
So what is it? If Apple goes up 2 percentage points in, say, the U.S. and the U.K., but the wages in Malaysia went up this year (I am speaking in hypotheticals) and every family bought a PEE-SEA, that could wipe out Apple’s gain?
I certainly welcome everyone to the world of computing, but I don’t want to hear about ‘95% marketshare’ if 5% of it is to customers who would NEVER buy Photoshop, or pirate it for that matter. I want that 5% in a different category. A category that might buy more ram a bigger drive. But NOT the category of $500 software packages and iPods. I want to see how big Apple is in THAT category. How big the installed base is.. This helps encourage developers to support the Apple platform.
‘Nuff Said!!
david vesey
Gobshite. When the medication wears off, he’s gonna feel really silly.
If the Apple iPod/iTMS combo is doing so poorly, why can’t I find an iPod Mini for my wife anywhere?
‘Gobshite. When the medication wears off, he’s gonna feel really silly’
Uh-Oh… does it SHOW?
Actually I’m on Ritalin and Oxycontin at the moment (prescribed by doctors.
I have this terrible disease, temporarily, that keeps me in constant pain). So I need to be drugged up to be pain free. The Ritalin keeps me awake.
Should I go back to sleep?
dv
Interesting angle. Had it occurred to you that Apple may be overdue in taking the non-USA world serously? Over here in Europe everything arrives, late, never or overpriced! And Apple customer service is a long running joke from Ireland.
Dear Mr. Zalon, here are a couple suggestions for your new service:
1. Ask Napster how well the subscription based model works. The answer might make you change your mind.
2. Lay off a third of your staff now while you can do so quietly. That way you can save yourself some embarrassment when your service goes public and fails miserably in the spotlight.
The iPod has outsold ALL of it’s competition without even blinking an eye (or is that an “i”?). For that reason alone, by using WMA, you are setting yourself up for failure. Now might also be a good time to go to Steve Jobs and grovel at his feet for the opportunity to load your store up with FairPlay AACs.
One last suggestion: put you resume on Monster.com as soon as possible because you can’t always get work right away when you need it – and you will by October of 2004.
david vessy (?!) writes: “Interesting angle. Had it occurred to you that Apple may be overdue in taking the non-USA world serously? Over here in Europe everything arrives, late, never or overpriced! And Apple customer service is a long running joke from Ireland.”
I hear anecdotes all the time about prices and service, but I’m curious about the actual disparity.
If the difference is indeed steep, then Apple is stupid to create a base of dissatisfied, and vocal, buyers of computer equipment.
But this is different from my “what IS marketshare” question. I’ve been blathering on for a long time, as well, about the Pee-Seas that occupy businesses and government offices, etc.
Why should THEY count towards a ‘marketshare’ of consumers who would buy legal downloadable music?
Counting a business computer in a gas station or a travel agency (as marketshare for, say, buying music) is like counting the number of people in cemetaries as part of a town’s population.
DV
$10 to subscribe to music that you can’t transfer to the iPod let alone keep? HA!
Why not just listen to (free) internet music streams instead? Granted you can’t choose the exact song you can listen to, you can choose the genre… Just click on the “radio” in iTunes.
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Zac Zalon??? Sounds like a bullsh!t porn name
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The purpose of ipod and iTunes is to sell more Apple computers.
Is it working?
The purpose of the iTunes online music store is to sell iPods. The purpose of iPods is to provide everyone with the ultimate portable music player, and also to make profit for Apple. “It” is obviously working very well!
OhWiseOne: – OhYes!
I won’t commend on when/if Apple should open up the iPod or Fairplay AAC… except to say that I don’t think the time is now!
But I will remind everyone of the momentum Apple has on their side:
* AOL
* HP
* Compaq
* Pepsi
* Future partnerships
* Best-selling music player (now with a new lower entry price)
* Biggest online music store success
* Constant great press–the standard against which other players/stores are measured
* A successful marketing campaign
* Insistence on uniformity–even overseas, despite the delay that brings
* A truly better easier-to-use products
* A major R&D effort making those products even better moving forward
And don’t forget that Apple isn’t alone in avoiding Microsoft WMA: Real and Sony have gone their own way too. (Real uses a form of AAC.)