“A year ago this week, Apple CEO Steve Jobs introduced an online music store that promised to make buying and playing digital music on portable devices like Apple’s iPod less cumbersome. It wasn’t exactly a revolutionary idea, but it had a profound effect. Many thought legitimate services couldn’t compete with free, unlicensed services like Kazaa. But Apple has sold 50 million songs and helped spawn an array of me-too services from Wal-Mart, Musicmatch and a revived Napster,” Jefferson Graham writes for USA Today.
[MacDailyNews Note: Apple has sold more than 50 million songs. Probably in excess of 70-80 million songs, at least. Hopefully, Apple will tell us exactly how many on iTMS’s first birthday, this Wednesday.]
“Apple dominates online music with an estimated 50% market share. Its iPod is the best-selling portable digital music player. But Internet analysts suggest the next year may not be as rosy as the first. The increased competition
JeffS said
“I hate when you guys bring up the rent vs. own argument. How do I own my iTMS music? Its pretty obvious from Apple’s recent actions against PlayFair that I don’t own my music. If I owned it, I should be able to do whatever I want with it provided I don’t share it with others.”
Peter said that subscription radio shows that people are willing to do the subscription model if it can be portable.
Both posters are forgetting one critical thing, if you miss a payment, all the music goes away unless you start paying again… To keep listening to the music, you pay every month, FOREVER. In the XMS radio example, your $300-$400 car subscription radio becomes worthless.
Invest the same hardware money into an iPod, and spend $10-$20 a month subscription fees on CDs or iTMS singles, and those are yours to keep, FOREVER with no monthly charges to keep listening.
Since music is an entertainment thing, and the money you spend on it could and would be reduced or eliminated in a financial crisis, where is the value of a rental system?
If I lost my job, or had to buy a new car, or repair the old one, or payments on insurance or a mortgage went up, I would still own and be able to use music from the iTMS, I would still be able to use my G4 tower, iMac, and laptops with iTunes. My iPod, (unlike an XMS radio) would still work.
Sorry, I don’t think the subscription model gives much value to a consumer. If I were a greedy music company, looking for a continuous revenue stream….. Thats another story.
OK, this rant is way off topic, but, when I hear subscription, I think of magazines. In the print world, a subscription has 2 advantages. I get the new issue of Backpacker, or Mac Addict CHEAPER than on the newsstand, and EARLIER. (a couple of weeks earlier) If I decide not to renew that subscription, the publishers Rodale and IDG (the IP right holders) simply don’t send me new issues. They DON’T take back the old issues I’ve already received, and deny me the use of the content in those issues covered by the subscription.
If a music service offered a subscription that gave me music 35-45% cheaper than the iTMS download price, delivered new music and artists 2 weeks earlier than any other venue, and let me keep the stuff I downloaded during the subscription period, then it would be worth it. Until that time, no thanks.
I’ll pay for subscription radio… when they can beam it directly into my head. That said,
“speculation based on nothing but conjecture” I agree Jadisone but I would add grounded in envy.
speculation based on nothing but conjecture, grounded in envy.
What a pathetic article looking to justify mediocrity and persecute Apple for providing an elegant solution in the iPod/iTunes combo.
Remember these are the same analyst that heralded the dot.com boom and what a wonderful world we were inheriting thanks to their wisdom and foresight. They don’t have a clue.
I’ve always said that Apple doesn’t compete directly with M$. As long as Apple continues to build great products, there will be a profitable market, and as evidenced by the sucess of the iPod, iTunes and the company as a whole, that is true.
What will next year bring. Apple will succeed and remain profitable. People will buy iPods, Macs and tunes and will just use them satisfied.
The battle outside of our wonderful world will be fought but underlying that battle is the desire to make you pay them for everything. How many of you have an HDTV. Will Janus allow you to play your “rented” music as a screen saver for your HDTV. Will it allow you to record that movie on TV at all or allow it to play after a week.
This is what is happening in the rest of the world. I worry more about the rental model affecting the rest of the world more than Apple.
The whole digital industry isn’t so complex. In fact, it’s rather simple…
The whole classroom has spent the past 10 years kicking and spitting on the weird kid in the back of the room; the nonconformist. Regardless, the kid still stays with the help of his small handful of friends, who are also seen as odd by the others. Now, all of a sudden, the weird kid has a great idea that is netting him millions of dollars. The whole classroom wants to be his friend, and he is saying no. They are all pissed and resort back to calling him names, and not seeing that it was their own selfish actions after all of this time that has caused their situation.
Apple has always had a good following, a small handful of friends, in the artistic communities; the musicians, visual artists, and the performers; the weird ones, “the crazy ones” [http://www.thecompleat.com/crazyones/video/index.htm]. From this friendship and their help, Apple has created products and services for the rest of the world. But the other digital companies are pissed off because now Apple won’t share. The digital community has ignored (and often stolen from) Apple for a very long time, I see no reason why Apple has ANY reason to cater to them now. Apple’s focus has been in helping the people, the creative ones and the needy ones, the ones that would rather paint a sunset with colors, or via a melody or a poem, rather than wrestling with system drivers and config files. Apple’s patience by continuing to do what is right has finally netted them the recognition and financial rewards they have so long deserved. The digital parasites that are now crying “foul”, deserve nothing.
It’s jealousy; pure and simple.
“Microsoft, meanwhile, has signed up Musicmatch, Wal-Mart, Napster and others to sell music in its Windows Media audio format.”
Microsoft isn’t “signing them up”. They’re licensing WMA from Microsoft. The way he states it sounds like MS is putting their little army together, arming them with WMA.
“Those tunes are compatible with digital devices from 60 companies, including Creative Technology, RCA and Rio Audio.”
No one cares if there are over 60 products available that can use these WMA based stores because no one is buying these products, OR using these stores. Not only will the stores be out of business soon, but the products will be discontinued.
When will these guys wake up? Are there really that many stupid people in the world? Wait, scratch that. 90%+ of the population uses Windows. Wasn’t it Roger Ebert that said that Apple’s marketshare is a good measure of the percentage of reasonable people in the world? Sounds about right to me.
Sooooooooo if all of Apple’s competitors can sell more music playing devises than Apple they will beat Apple and get all of Apple’s PC owning customers. Thats a bit like saying that every Porsche or BMW owner wants to trade their car in for a Toyota, because Toyota has a larger share of the market.
Beatsme:
No, you’re missing the point.
Sony artists sell music on iTMS because iTMS works with the iPod.
Sony’s store will work only with devices which support ATRAC – which is a compression scheme – as opposed to the DRM which is presumably another version of MagicGate, which is also proprietary and, until now, Windows only.
iPod and iTunes users have shown themselves to be sophisticated and willing to stay legal by using iTMS. Whereas users of other personal audio players are obviously less willing, otherwise the WMA stores would be doing better.
So if Sony Electronics sells 2000-4000 more units every day, but those units get loaded with illegal MP3 copies of Sony Music’s catalog, how does that benefit Sony Music? And bear in mind that Sony will need to sell 3.5 million units just to catch up with where Apple will be at the end of June, and around 6.5 to 7.5 million units by the end of December. 30,000 units per day just to catch up sounds a bit far-fetched, but what do I know.
Your theory suggests that Sony Music (hard nosed American music industry types) will be willing to be hostages to the fortune of Sony Electronics (resilient Japanese corporate types), to which I say: ‘You’re avin a laff’.
There may well be exclusives (temporary or otherwise) that Sony Music keeps in family. But the idea that Sony Music will remove itself unilaterally and totally from the most successful online music store shows an unbelievable level of naivity about the dynamics of Sony Music’s relationship with its parent, as well as a stunning lack of understanding about the power of artists who will be less than pleased that their music and earning potential is being used to research what is an experiment.
“[…] if you miss a payment, all the music goes away unless you start paying again… To keep listening to the music, you pay every month, FOREVER.”
Well, yes. On the other hand, if I stop paying my cable bill, I don’t get to watch Cartoon Network anymore, either.
Where I would find a subscription service worthwhile would have the ability to download music I have subscribed to a portable player. I should have to plug-in my player within a month in order to reauthorize (so I can go away on a three week vacation without worrying about the music disappearing). I’d also like the subscription service to offer me discounts on music I decide to purchase in a non-compressed format–say two free songs a month or a 50% discount.
You make the argument that people want to “own” their music, but I’m not sure that’s true. People want to listen to music, but they don’t necessarily want to own all the music that they listen to.
As an example, it’s Friday night and I’m joining a bunch of friends at a club. I want to listen to a bunch of dance mixes on Friday to get in the mood. So Thursday night, I download the top 100 club mixes according to Billboard, stuff them on my iPod, and I’m gone. Once Saturday rolls around, I’m probably going to dump most of those club mixes and put on some music more attuned to my romantic dinner I’m planning with my sweetheart that night.
In your example, I’d have to spend $99 to do this. In mine, I’d spend $10. If I heard a few that I wanted to own, I’d spend, say, 50 cents for each.
Yes, I agree that renting all of my music would be expensive–there has to be a purchase plan as well.
” But I think that the success of XM and Sirius show that people are not against the subscription model for music.” – Peter
No, the only thing that shows is that free radio SUCKS.
Windows Sufferer …”I wish I could just kick myself in the face for being so fscking stupid!
ROTLMAO.
Dude, that would be quite the feat (no pun intended) and really funny to see.
: )
Peter,
Subscriptions are only good for finding what you want to own. Would I want every program aired on Cartoon Network? Of course not! Do I own DVD’s of programs I really like? Yes I do. Could XM or Sirius satelite radio replace my music collection? Absolutely NOT! For content that is important to me, I want to own it.
I have been purchasing music for over 30 years. I would say that 60% of my collection is out of print. What guarantee do I have, once I plunk my money down for a subscription, that I will have access to the content I paid for? Should I trust the content providers, corporate media giants, and RIAA to support my eclectic tastes?
Subscriptions are fine for the fad of the week listener. But, for the serious collector/listener, who spend the serious bucks on our collections, ownership is the only way. We want the control of our music collections.
Re: ATRAC
as long as the Sony player also plays MP3’s, it won’t matter what proprietary DRM they use to encode their file
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The iPod plays MP3s…so what is your point. Why is the iPod any different. What about the HP deal? This will put iTunes On how many PC desktops? Not to mention the fact that HP is going to be selling iPods. 94% suddenly got a lot smaller. What other deals does Apple have in the pipe? I don’t know do you? Why is Sony exempt from the same argument that is being made about Apple? Sony only owns music from Sony. Why would the 4 other major labels want to contribute to Sony’s bottomline. How is Sony going to offer more of a variety of music than Apple can? It can’t. I’m sure the record companies will weigh the cost of running there own music sites versus the cost of farming out the task to companies such as Apple. For the record companies Apple is a retail outlet much the same as record stores used to be. They are not competition, they are a compliment. Apple is a distribution channel that does not compete with the record labels. Sony is competition. Sony is only complimentary with & for Sony.
Why Apple does not start a subscription Music “club” is beyond me. If they can get the go ahead from the record labels…
I for one (a student) would be more than happy to spend 10 bucks a month to access 500,000 songs as long as I could take them with me on my iPod. 10 bucks if only 10 songs. I (and I may or may no speak for the youth generation) love to listen to a song for a couple of weeks before I get sick of it. I understand the subscription model was stupid whilst the songs were not portable, but microsoft has just developed some new DRM software that allows subscription based songs to be played on portable media. Im sure Apple could do the same with Fairplay. I think Apple should seriously consider this model again… mayby they could tie it in with .Mac or something. I know it would be successful with people like me who cant afford to pay for the 50 or so songs a month that I listen to and then end up discarding 80 % of them….. what does everyone else think?
Just to clarify…. I agree with Steve Jobs that I want to OWN my favorite songs and listen to them “hundreds of times”. However there are also plenty of songs that I like to here ten times… then dont care if I dont hear them again…
“Subscriptions are only good for finding what you want to own. Would I want every program aired on Cartoon Network? Of course not! Do I own DVD’s of programs I really like? Yes I do. […] Subscriptions are fine for the fad of the week listener. But, for the serious collector/listener, who spend the serious bucks on our collections, ownership is the only way.”
Actually, I would argue a subscription/purchase combination would be a deal for the serious collector. From my example above, if you bought 20 songs at fifty-cents each and paid a ten dollar subscription, you’d be right around iTunes (actually, iTunes would be $19.80). Since most people aren’t collectors, the company offering the subscription would probably make money off of it if they offered it like the cell-phone people (eg, you must sign up for a one year membership).
Like I’ve said, I would not want to rent my entire music collection. And, personally, I don’t want to spend $10/month on music that I can only listen to in front of my computer. But I think a clever combination of the two that allows me to have both capabilities could be a moneymaker.
But I don’t believe in it enough to start my own music store. :^) :^) :^)
cj.. you don’t see ppl bringing back old CD’s a month later and saying.. yeah i listened to it alot and now i don’t like it..
apple’s providing a great value for one hit wonders…