“Chris Gorog is convinced that people won’t continue to pay $1 a song for online music. That is despite Apple’s string of recent achievements, including 200 million songs sold at its iTunes Music Store, and nearly 4 million iPod digital music players moved into consumers’ homes in 2004,” Jefferson Graham writes for USA Today. “Gorog runs Apple rival Napster, which offers digital downloads and a music subscription deal. Consumers get unlimited access to listen to 700,000 songs for $9.95 monthly.”
MacDailyNews Note: Apple had probably come very close to or exceeded 4 million iPod units sold in the last quarter alone.
“The hitch is that to move songs onto a portable digital device or to a CD costs extra: $1 a song. That’s one of the reasons digital music fans have not taken to the subscription model – also offered by Real Networks’ Rhapsody – in a big way. But Gorog thinks that will change next year. And he has other heavyweights such as Yahoo and Microsoft in his corner,” Graham writes.
Full article here.
MacDailyNews Take: If Apple sees the subscription model becoming popular, do you think they might have a plan for instituting that option via the iTunes Music Store? Wouldn’t their market-dominating position pretty much demand that they have already thought of this very obvious option and have a plan ready to go?
Like I keep saying I don’t want to rent my music. The subscription plan sucks. It makes you pay for streaming music which you can get for free! That’s the only benefit right now for subcriptions which to me is not a benefit. You still have to pay the same amount to download the songs you want to keep. So where is this big gain in the subscription model. Only to the vendor who is selling it to the suckers who want to pay $10 a month for something they can get for free that’s who.
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Why Rental models for music fail.
When you stop paying you stop listening.
Rental will probably work for video, since that is generally a watch once, or twice deal.
but I listen to music while working, playing games, doing dishes, etc.
If I can’ afford to pay my rental for music or for tv, which would affect me more?
As my pappy used to tell me – It is ALWAYS better to OWN than to RENT!
Me Gorog, me hate Apple.
Am I missing something here, or is Gorog talking out both sides of his mouth? He’s convinced that people won’t continue to pay a buck for a song, but isn’t that what he wants people to do? Pay a monthly subscription fee to listen to music, but if you want to own it you have to pay a dollar over and above the subscription fee? Someone help me out here, my brain is melting from trying to grok the logical contradiction.
(And I still think his name sounds like a character out of Tolkien, maybe one of the orc captains.)
Old news!
http://www.macworld.com/news/2004/12/09/subscriptionanalysis/index.php
Sorry, hit the submit button by accident in my confusion.
I was going to add that the real attraction of download services is so that you can take your music with you, via digital music player or CD (iPod sales support this assertion). As far as I can tell from my own experience (and watching my kids), no one listens to music on the computer; they use it solely for managing their playlists and burning CD’s. They only listen to music on their iPods, or when they visit friends, on their friends’ stereos with CD’s they take with them.
From this standpoint, the idea of a subscription service just doesn’t make sense to me. If anyone out there disagrees, please enlighten me.
There was a poll about this a couple of months ago at http://news.com.com/
(sorry couldn’t find the page)
The question was how people wanted to get hold of their music.
It’s was pretty obvious that people did NOT like the idea of subscribing to get it.
It got the least number of votes.
Where’s the substance behind Chris’ opinion?
If a subscrition model doees come into play what is to stop you from subscribing to sattellite radio? It’s a better deal if you are not one to buy music or OWN music because you think that it is such an everchanging fad. And you are one who is content with the lastest songs cycling through and dont care to collect songs. Just a thought.
rent music at 9.95 a month, thats almost 120 a year. right off the bat you can download 120 songs from itunes more if you just download 12 albums but it doesnt stop there. to get the 120 song from the subscription stores you still need to pay another 120 bucks. so know you are in 240 dollars to get what you can on itunes for half. its just a downward spiral from there.
The subscription method loses money.
The online store loses money, the RIAA loses money and the artists lose money.
Selling music online barely breaks even. So where is the profit here?
Everybody wants to own the music and put on what they want, burn it to cd, put it on their iPods and yes, trade it.
They are willing to pay a buck a song to have the freedom with the music.
The low end market, gets all their music via P2P, so who wants subscription music when they can have free?
We who pay for our music, do so out of kindness and convienence.
So iTunes just rules!
Take your subscriptions and shove it!
SUBSCRIPTION = BAD IDEA
Clearly everybody who downloads music from the iTMS knows what they want: $0.99 per song with generous user rights. The concept is simple and to the point. The competition just doesn’t get it. Their (Real, Napster, etc.) business model has failed and continues to fail. Why should any credible business person, journalist, or consumer believe they can deliver with a record of failure?
At this point, subscription services for iTMS would be detrimental to the Apple infrastructure. If you do some math (which intelligent analysts should do everytime they open their mouths) you’ll realize that if you multiply the iTMS user base by the number of songs in the iTMS catalog and then factor in the bandwidth necessary to accomodate all those downloads (worst case scenario)… it would be a major disaster.
A real analyst would look at Apple’s .Mac subscription service and realize that this segment of the market could use a boost, say from the addition of weblog support, Garage Band support (posting of demos), and possibly some tie-ins back to the iTMS (10 free songs the moment you sign on). Expect this year’s theme to be CONVERGENCE.
“….no one listens to music on the computer; they use it solely for managing their playlists and burning CD’s.”
—–
I basically only have two places I listen to music, my powerbook at home with some harman kardon soundsticks, and my G5 at work using the headphones from my ipod.
oh yeah..and 15 minutes of car radio to and from work.
Well, there is always the stupid argument they give you that it would cost you $700,000. to have their entire collection on your computer from iTMS in the first month and only $10 to do it from them. They never mention that it would take almost a year and a half at 8 hours per day just to listen to each tune only once.
Napster, etc., are pissing in the wind.
People will pay a small amount to do legally what they can do for free illegally–download the music. Evidently people are not interested in paying money for the honor of being tethered to their PC, a particularly stupid business model as laptops become ever more popular and iPods sell by the millions.
The same goes with video–that won’t work by subscription either. I get home too late to catch most shows at their air time, am not interested in using something as antiquated as videotape, and see no point in using a TiVo when the video files are stuck on the machine–more tethering. Moreover, I don’t have to do any of the above because the shows are available through bittorrent download the night they air, and are generally ready to be watched on my computer, laptop, whatever I want the next night. And I can watch stuff that way that isn’t broadcast here–Sky’s version of Buffy, Hex, for example.
I would happily pay ABC or the producer $2 to download Alias’ season premiere, but of course that isn’t an option. So I’ll get it through bittorrent for free. And don’t give me any crap about stealing–I did the same thing last season, and bought the DVD set when it came out.
They been screaming “convergence” since I was in diapers. I’ll probably be dead before that happens.
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I think most of you are a little short sighted like myself when I got into a discussion with someone that I never really thought existed.
This person told me she didn’t understand the lure of the iPod. She is a satellite radio user. Does NOT buy CD’s. Made it clear to me that she would not pay 99 cents a song. (She thought it was too high) Rarely collects songs to keep to listen to for future use. Thinks that music is an everchanging fad. She listens to what is handed to her of her genre of choice.
I call her a “floater”. She floats on the stream of water and glances at the scenery around her…with no real desire to “collect” anything. She is content with the boat that she paid (monthly subscription) for to see this scenery.
Think of it as listening to iTunes Radio but in your car and at home. (I understand that iTunes at home would be “free” but you still cannot have iTunes in your car….not without a laptop hooked up to WiFi with spotty areas) Satellite is the logical choice for the car.
There are people like her…there is a market for satellite radio…which uses the subscription model and it works. Any other perspective is appreciated.
Larry.. amen…
Furthermore.. we all know none of these guys wants to compete with the iPod.. and they don’t wanna compete with ITMS..
But seriuosly, besides that.. Isn’t it eery how all these guys love the subscription service.. let me think.. would that be because THEY MAKE MORE MONEY OFF CUSTOMERS?
Ummmm .. Yeah.. Apple only makes a few pennies per song.. These guys make a steady stream of cash no matter what.. so you’re kind of locked into to your music.. like a utility bill.. gee that sure sounds like ‘giving people what they want’ (sarc)
Liars.
Wait now, he may have a point. People WON’T continue to pay for music at $1.00 forever. I mean, once each of the tracks on the iTunes Music Store has been bought by every person on Earth, THEN who will they sell to?
BWAHAHAHAHAHA! THEN the SUBSCRIPTION MODEL will RULE!
Commercial Free Satellite Radio is the answer to the subscription model. A music store is about buying music, not renting it.
Seems to me that all subscription services act the same in the absence of competition. They all start out looking financially attractive, then slowly inch up in cost. 10 years later what started as $15/month now costs $45/month. Think of your cable TV bill.
Granted that you get more channels today than 10 years ago, but how much of it do you really want to watch/listen.
Lets hope the general public can see through the ruse being marketed to them.
I can always hope….
I didn’t think the subscription model made much sense when I was under the misimpression that you could take your music with you on their iPod knockoff.
You mean the subscription service only lets you play the songs on your computer?!?!?! You have to pay a monthly fee AND a $1 per song to put it on your portable player?!?!
You are kidding, right?
giofoto-
I’ve seen a couple people like you mention. I think they are quite rare though. These “floaters” as you call them (and I like your analogy by the way), are people that like music, but don’t love it. They are fine with music playing in the background, but can’t understand why anyone would want to sit down and listen to music only for the pure joy of listening to music. They have no need to buy it. They are willing to take whatever crap is spewed their way. And lately, most of it is just that- crap. I kind of feel sorry for them because there is some really good music out there if you look for it.
I think most people do have some connection with music that goes beyond the “passive listener”. Music is one of the universal languages, and I think you would be hard pressed to find too many people that share the “floaters” point of view.
Let’s say in 6 months to a year people really start to want subscriptions. What’s the first thing they’ll want?
“Yeah, I want a subscription….but it has to work with my iPod”
Um, I wonder who’s the only company able to do that?
Either, way if its subscriptions or $1 per song, Apple wins as long as they keep selling iPods.
I think the “floaters” choose to live a simple life. And it it comes their way…they will appreciate it for what it is and keep on walking.
We should know sooner or later how much of a “floater” population we have.