Apple iTunes Music Store also-rans pin hopes on subscription model

“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?

30 Comments

  1. They been screaming “convergence” since I was in diapers. I’ll probably be dead before that happens. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  2. 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.

  3. 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.

  4. 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!

  5. 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….

  6. 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?

  7. 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.

  8. 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.

  9. 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.

  10. I’m surprised no one’s mentioned the new Napster ad that’s been playing non-stop on some cable TV channels. Great choice of spokesperson, huh? Yeah, I wanna be just like the office social-reject who looks like he never bathes! Sign me up, Napster!

  11. think about a portable subscription service with both on-demand and broadcast streaming with a-la-carte options for those who really want to own your music.. for $15.00 a month for access to one million + songs.. that’s not too shabby.. you ipod people are sooo brainwashed! think ahead ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  12. Giofoto:
    I think you just coined a term, my friend. Congratulations.

    There’s two types of people in this world: floaters and swimmers

    – or at least when it comes to music

  13. Now, Microsoft’s Janus is supposed to let you transfer your “rented” music to certain as-yet-unmentioned (and probably unreleased, wonder how much marketshare they have) WMA players. The SMART thing to do would be to allow subscribers to have access to all the content on their portable player for the same rate.

    This means by default (because they won’t do what’s smart) that they will have a tiered subscription plan based on where you want to be able to transfer your tunes to.

  14. My favorite quote :

    “We sell hundreds of downloads,” Goldberg says. “But we don’t make money on them. Subscriptions is a much better business for us.”

    HUNDREDS??? 😀 Wow…

    At least he’s honest.

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