CNET Editor: Apple will soon introduce subscription-based music and video service

“Going against conventional wisdom, I think Apple will soon introduce a subscription-based music and video service. Although music-subscription services have been in the digital music rotation for years now–and with relatively low success–Apple has repeatedly shunned this still intriguing distribution model for its iTunes Music Store. But the digital music space is still young, and as competition from the likes of WMP 11 and Urge heats–or, rather, warms–up, I believe Apple may shock us with its own bulletproof version of an all-you-can eat iTunes club. And consumers will lick it up,” James Kim, Senior editor, CNET Reviews writes. “While subscription services have struggled to capture the hearts and wallets of the masses, the infrastructure and the standards for operating a service are ready to go. While not everybody will warm to the idea of renting songs, the time is now for users to accept the subscription model as one of the many options for consuming music.”

“Imagine a subscription-enabled iTunes 7 with all-you-can-stream access to more than 3 million tracks for $10 month. You’d also be able to compile playlists manually or automatically using a mix of your own songs and the entire iTunes catalog. You could actually fill up a 60GB iPod with the click of a button. You’d still have the option to buy tracks, perhaps for less than 99 cents. As a subscriber, you’d get access to videos and maybe even movies for a few bucks more. Of course, you’d have to get the newest iPod, equipped with an internal subscription clock,” Kim writes. “I can’t believe that in five years, Apple won’t have a subscription service. The company has taken note of the problems on the WMA side, plus it has the advantage of controlling both the hardware and software sides of the subscription equation. The time is now for an easy-to-use, utterly convenient, and cheap subscription service from Apple.”

Full article here.

MacDailyNews Take: A subscription service option for iTunes that works for both Mac and Windows PC users plus also works with iPods? Now that sounds like a winner to us. Not for everyone, of course, but it would be a nice option to have. What do you think?

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Related articles:
Apple iTunes music and video store takes first step toward subscription model – March 08, 2006
Survey hints at Apple iTunes movie service with subscription, a la carte models explored – March 02, 2006
EMI Music Chairman: Music subscription services like Napster and Rhapsody haven’t beeen huge – January 23, 2006
BusinessWeek: Apple unlikely to launch music subscription service – August 15, 2005
Merrill Lynch analyst: Apple could ‘flick the switch on a music subscription model’ – May 13, 2005
Apple cautious about online music subscription model – May 09, 2005
Study shows Apple iTunes Music Store pay-per-download model preferred over subscription service – April 11, 2005
Should Apple add subscription service to iTunes? – March 07, 2005
Apple to add subscription-based option to iTunes Music Store? – December 06, 2004

76 Comments

  1. I’ve always said that they should have a subscription-based video store and a pay-per-download music store. It just makes the most sense because that is what people are used to. For years (before iTunes), you would go to a record store to buy your CD’s and you would go to a video store to RENT your movies.

    Seems obvious to me.

  2. Nah. Call me old fashioned, but people still like to have ownership over their music. The streaming-and-buying-for-€10-a-month-and-less-than-99c-a-track model just sounds unnecessarily complicated to me.

    MW: truth, as in ‘ain’t that the…’

  3. If I had a subscription with the option to purchase, I’d likely buy more. I’m always looking for new music, but I hate buying an album and finding out its crap. With a subscription service, you could have a Try-buy which would be great!

  4. If Apple moves to a subscription – fine – if they leave the ability to buy songs as it is now as an option – so we can choose which option best meets or buying habits. Early on when I was first buying lots of songs a subscription would have made sense for me. Now, however, I only buy a song every so often – maybe one every two months or so. If I have to buy a subscription for that – no thanks! If it were up to me – I would leave it as is. Not everyone who enjoys iTunes is buying tons of songs every week or month.

  5. i still believe in *owning* my music… but options are always good i suppose. but rest assured subscription services will never get my dollar. simple as that.

    frankly, if anything, what i would much much rather see is the option to pay a few cents more for 320 kbps aac or lossless! WITH liner notes and lyrics included for every song, thank you very much. the closer the digital product can approximate the physical, the more likely i am to spend a greater percentage of my music dollar at itms versus amazon, or any number of overseas vendors, online and offline. (my current habits). paying for overseas shipping is a bitch! but please…i need a worthy alternative. and 128 kbps is only acceptable (for me) for the most casual of purchases.

  6. i wanna own my music, so if i lose a job, i can listen to depressing sad songs, not silence because i cant keep up payments, music renting is bad, the average person doesnt even buy that much music, so it would be cheaper for them to just by the 1-5 albums they get a year.

  7. iTunes may be forced into a subscription option, but by a force outside of Redmond and the music labels.

    The true pressure of adoption comes from Hollywood.

    The movie industry is in poor shape, but no where near where the music labels were a few years ago. Technically speaking, online pirating of movies is increasing, but movie file size + lack of bandwidth + waste-o-time = slow movie pirating rates.

    Hollywood will be content to spin out down load services through a host of companies and slowly grow it’s online presence, avoiding partnering with Apple, putting pressure on Apple to play their game.

    Counter to this direction is Steve Jobs. Steve has arm-twisting abilities like no other at Disney, and this may be the key to flushing out Hollywood.

    Disney will deliver their movies through various online services, but Steve will take sure that Disney movie content is delivered the way Steve desires on iTunes.

    If Disney titles sell/rent at a rapid pace on iTunes (quite likely), one by one the movie houses will cave to Steve Jobs iTunes distribution model.

    From a practical view, I would say the former model of Hollywood getting there way is most likely. But track record-wise I would not bet against Jobs being the eventual victor.

    Meanwhile, Bill Gates will continue to talk about the time MS has in entering the market, and how great they will be when they do – along with waxing about how much OS and Office market share they have…

  8. Man, if Apple introduced a subscription service to go along with its pay-per-song model, the competition wouldn’t stand a chance. I would even wager that the subscription model would actually become successful if Apple introduced it. There would be so much blood on the click wheel of the iPod it wouldn’t even be funny.

  9. As a recording artist with songs for sale on all major services, I can assure that subscription models stink.

    I personally end up getting a fraction of a penny for each of my songs that someone “rents.”

  10. I’d be thrilled to have both a subscription option and a permanent purchase option, provided it doesn’t screw up anything iTunes already offers. There’s music that’s worth $10 an album, and there’s music that’s worth a couple dollars to rent for a month.

    And if iTunes were to offer a subscription service, it would pretty much blow away the other music stores’ argument that it’s sooooooo expensive to fill up an iPod. (It isn’t, for those of us with 20-year-old CD collections numbering over a thousand discs, but somehow they neglect to mention that.)

  11. I’d prefer subscription for video and tv as opposed to buying i’m not that type that buys season series on dvd and stuff like that. i usually rent my movies too. don’t usually watch a movie over and over. but my music, i certainly like to own that, plus music is way cheaper than video. if itunes sells movies for even $9.99 each, i don’t think i’d buy. i’ll still go to my local kick@ss video store and rent it for $3.50 if i only plan to watch it once. my 2¢ at least.

  12. I think it makes sense as a business plan. Even if only 5% of users decide to subscribe, it’s a nice revenue stream for Apple. Apple has enough marketshare to dominate subscription services and it gives Apple one less competitive weakness. Also, because Apple dominates, when any other subscription service fails, people are most likely to move to the most reliable alternative. It was sensible for Apple to wait, but now that they have a big enough market, subscriptions aren’t a bad idea.

  13. Best idea would be a subscription where you could try as many as say 2000 songs per month (how many new songs you going to listen to anyway). By the end of each month you could designate say 10 songs from your subscription you could then own. That way you get the best of both worlds.

  14. I wouldn’t mind a reasonably priced subscription service – there is a lot of music I would like to try but don’t want to commit to buying outright without having had a real chance to listen to it, plus there is a lot of music I like for a time then get bored of so wouldn’t mind not actually owning. What would be great is a low price with possible some sort of reduction if you want to buy it fully, I’m not talking massive amounts but even a few cents per song might (depending on how much music you buy) make the subscription itself more worthwhile.

    Having both options would be great, after all if you don’t want to subscribe you don’t have to.

  15. Andy,
    “music renting is bad, the average person doesnt even buy that much music, so it would be cheaper for them to just by the 1-5 albums they get a year.”

    – You’re partially correct. Most people do not want to spend a lot of money on music, especially since music tastes change and they may not want to be stuck with albums that they may not particularly care for a year or two later.

    Now, if a person only buys 5 albums a year, that’s not that many songs to listen to on your iPod, unless you’ve already bought or stolen thousands of dollars of music. But for the same amount each year, you can select from millions of songs that accommodate a wide variety of changing music tastes, and still have money to spare on the few albums that you really want to keep forever.

    An advantage that Apple has is that they would not be dependent on the subscription service for profits. In other words, they can price their subscription service much lower than the competition. This would be a great way to give consumers even more choice.

  16. CNET has wrong forecast. Apple will be stick with old policy at least for music, music videos, TV shows. but if Apple will release new movie download service with new ipod video which will come Thanksgiving, Apple will put this service becasue the length of movie download is too much longer so streaming is better like ABC full feature streaming TV shows recently.

  17. Hmmmm. If you want my 2 cents, here goes. If not just leave it at the local 7-11. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    I would never rent long term. Period.

    BUT—– from time to time, I might get a months rent just to listen to songs that I think I might want to buy.

    You know, Hmmmm, I am bored, wanting new songs but not sure where to spend my money. One months renting and check out 30-50 songs. Make my selection and then buy them direct or online if only a song or two.

    But then, thats just me. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    N.

  18. “I wanna own my music, so if i lose a job, i can listen to depressing sad songs, not silence because i cant keep up payments.”

    And that’s fine.

    What’s fun with subscription services is, like a radio, you can hear lots of music and decide what you might want to buy. Combine this with iMixes and you may have a batch of home-grown DJs programming music for the masses. Heck, commercial stations might get into the mix and publish their playlists for promotional purposes: “Here’s what we’re playing this week on KBIG!”

    As I’ve said, I’m not convinced that the subscription model will beat out the purchase model. Where I think the subscription model works is competing against subscription radio services, like XM and Sirius. I’d pay $10/month to load up my iPod with Celebrity Playlists from Liv Tyler and Al Franken, The Basics of ’80s Hardcore Punk, and some good iMixes. Heck, mix in some podcasts and I’ve got my own personal radio station that I can use on my iPod in the car, at home, on my computer, etc. etc.

    Doesn’t sound too shabby.

  19. a subscription service is foolish. It is too easy to capture that music with something like audio hijack, as is happening on college campuses that have embraced to subscription model. Why a label or artist would sign on to subscription is beyond me.

  20. This would totally screw up the relative openess of Apple’s DRM. They’d have to alter it so that you couldn’t easily burn CDs of downloade tracks and begin restricting the number of systems you could play these songs on more than they do now. Why let you play on 5 computers and give away the income form 5 possible subscriptions?

    Apple could do it, but it won’t be pretty. I prefer to own my music and I want my music to play without a “subscription time” lording over it. When I hear a song I like, it rarely takes me more than a minute or so to know it, and I buy it. Simple.

  21. 3rdKidney,
    “This would totally screw up the relative openess of Apple’s DRM. They’d have to alter it so that you couldn’t easily burn CDs of downloade tracks”

    – That’s really not that hard to do in a relatively simple way.

    “and begin restricting the number of systems you could play these songs on more than they do now.”

    – No, they wouldn’t have to do that.

    “Why let you play on 5 computers and give away the income form 5 possible subscriptions?”

    – Because the primary source of their income is from hardware sales, not music sales. If it gives people a reason to buy more iPods, then it is a success.

    “Apple could do it, but it won’t be pretty.”

    – Actually, I’m quite sure that Apple could make it pretty, as is the case with most everything they decide to do.

  22. Finally, a safe way to steal music on the Mac. Windows users have had this feature for years. No more worries about illegally downloading music on the net, just steal it from your own computer and leave no record with your IP.

    Apparently you have to subscribe for at least 2 months to fill a 60 GB iPod with stolen subscription tunes.

    $20 to $30 for 60 GB of music that I own with no record of stealing it.

    Sign me up!

  23. Won’t go over at all

    Apple’s hardware products cater to artists; music, graphic and film production.

    The reason iTunes is so popular with artists wishing to place their material on the iTunes Music Store is because <b>they don’t do subscriptions</b>.

    Apple tries to help artists sell music which in turn attracts the largest online music collection.

    Subscriptions cater to thieves and cheap bastards that can’t or won’t give artist a frigging buck for a song.

    Apple isn’t about appearing cheap and won’t go in that direction. They rather lose market share first than cater to the “low margin” crowd.

  24. As long as it is only an option and not forced upon people that would be fine. But I personally would rather buy my music and not have to pay for it every month. So hopefully they’ll have both options available for those who would like to subcribe and those who would rather buy like me.

  25. About the video

    Video costs a heck of a lot more to produce than music.

    Hollywood has to charge a higher premuim for movies in order to make a profit.

    Expensive iPods work because of iTMS and cheap content.

    Since EFI computers with HDCP content protection are not the majority yet (Intel Mac’s are) and there is no DRMed monitor yet, forget seeing any sort of online video service.

    Plus internet service providers are already complaining and wanting to charge online services for taking up too much bandwidth.

    It’s mostly coming from cable companies who see video online services cutting into their cable box extortion racket.

    Now there is this ultra compression alogrithm and new TCP protocol that combined can get about 5000x the bandwidth using the present structure in place.

    Of course the snoops don’t like it. But it would work very well if implemented.

  26. I think that subscription models are going to become more popular in the future. The reason they have not caught on is because everyone is on iTunes and has no idea what they are.

    Apple isn’t going to do it yet but I would bet that as Movies are phased in and TV content grows we will see a tiered subscription for music +/- TV +/- movies for varying amounts of money.

    This may be controversial but I would go so far as to say that subscription will be the only way for movies and realistically for TV shows too. The reason for this is that the video quality is basically shite and is going to say that way for some time. It just in not good enough to watch on a big flat screen. This is especially important for movies. We are not going to see actual HD content for at least couple of years, when the infrastructure can hold it, and until we do the mass market isn’t going to pay for outright purchases when they can get DVDs for the same money. However, a widescreen iPod and a subscription could be tempting.

  27. Steve Jobs also once said that x86 sucked. So much for that.

    Point of info for all the C/Net Haters out there: They were the site that broke the story of Apple dropping PPC chips, BEFORE Jobs announced it offically. As I remember, almost everyone posting on MDN back then said stuff along the lines of “never gonna happen”, and “C/Net is always wrong” too.

    ” width=”19″ height=”19″ alt=”cool smile” style=”border:0;” />

  28. Subcription for Music would stink, but……for VIDEO? HELL YES!!!! Think about it, a video subscription service would be a near perfect replacement for my stupid, expensive, nothing ever on Cable TV Subscription. The problem with iTMS now is that I got all these dumb shows that I’ve purchased over time just gathering space on my hardrive. How many times am I gonna watch a particular episode of Top Chef? Twice maybe? The point is that I don’t really want to keep these television shows forever, I just want to watch them, and move on to something else. However, I can’t bring myself to delete any of them because I paid $2 for them! But a video subscription service would allow me to pay $20, keep only lets say 10 shows at a time, and effortlessly replace the Cable TV!

    Music subscription…..stupid, we listen to some of our songs possibly hundeds of times over our lifetimes. Video, specifically movies and more so TV Shows, a handful only.

  29. @Realist:

    I think you might have it wrong:
    1) Regarding the # of computers authorized:
    It really won’t be up to Apple – the record companies would want to get as much income as possible, beign allowed to use this on more than 2 computers would limit their revenue – they wouldn’t let Apple do this without a major revision to the contract.

    2) The cost for subscription is low in the beginning, but spread that over many, many years I believe it becomes more costly than straight owning. I’m sure many of us have old albums from the 1970’s and earlier. I like and I think I’m not alone in being able to go back and re-live my life in music.
    Based on the subscription model I have to pay and pay and pay and pay to keep what I love or use to love. By the way I won’t have anything to pass on to the future gene pool.

    3) Do you think the record companies will want to limit their income by giving a discount for those that want to purchase their music? From all indications I could see the record companies charging the same rate even if you had a valid subscription, they got you by the B@lls.

    Actually the more I type this response I think those that go with the subscription model are just short-sighted.

    My 2 cents

  30. “Nah. Call me old fashioned, but people still like to have ownership over their music. The streaming-and-buying-for-€10-a-month-and-less-than-99c-a-track model just sounds unnecessarily complicated to me.”

    elscir,

    I, and millions of other consumers, also like to own the music we pay for. But there are folks who would pay a subscription fee for music. Like businesses. My brothers and I operate a chain of grocery stores, all linked to the Internet with high-speed connections. An iTunes subscription service would be ideal for providing in-store music at all locations. I don’t listen to Abba or Barry Manilow, but many of our customers do. A choice of over 3 million streaming tunes would save us the massive ongoing headaches we currently experience in terms of sourcing music, compiling playlists, and burning them to multiple discs for multiple stores. The holiday season alone would be well worth it.

    Apple could easily target businesses with pre-compiled playlists for different locations and occasions, and managers would still have enormous latitude to create their own, on the fly if need be. Remember Muzak? They built an empire providing music to businesses. Apple could own this space if they wanted to. In fact they could easily partner with Muzak, providing the music while Muzak does what they do best, researching the musical tastes of each market and providing the playlists that most appeal to each business’ clientele. There are lots of possibilities, and Apple has lots of people who I’m sure are much smarter than I am, so I’d be really surprised if they haven’t already thought of something along these lines.

  31. @Static Mesh: “Now there is this ultra compression alogrithm and new TCP protocol that combined can get about 5000x the bandwidth using the present structure in place.”

    —-> Got a link to a story on that? I’d be interested in readng about it. Sounds interesting……..

  32. You know what I’d like to see… A system where you can donate money to your favourite artist.

    For example, I love Radiohead and respect Thom Yorke, but got all of their albums from P2P. I would happily donate $50 to the band for their hard work and great music, but paying $50 dollars to the record labels… never gonna happen.

  33. Be very careful with the laws you pick and choose to follow. This is not as much of a moral argument as so many make– you either buy music according to the rules, or you break the law. You are no hero if you subvert the labels, you’re a crook. There is no entitlement to music, or whatever you want. If you don’t like the deal, don’t buy. Certainly don’t steal.

    Taking things because you disagree with the system is saying “what I want trumps everything else.” That ought to work well until someone trumps you.

  34. Isn’t the problem with subscription based music services that you are then able to record the music with your computer. You could record every track you like for a mere $10 a month. There would be less need to actually buy the music then, even though arguably it may be better quality if you buy it.

  35. I got married because I like commitment. I commit and I seek it in return.

    Music ‘lent’ to me is just not good enough. There is no such thing as a 100% guarantee, and in a few years when the service is withdrawn (probably because the musicos’s will have found a different to route to make more money) doesn’t bear thinking about.

    Life’s too short.

  36. and how would this work?
    what happens to the songs on the ipod if you don’t continue to pay…fill it up (hehe have phun DLing 60Gb on anything less than a 10Mbit line) for 10 bucks and then don’t pay any more?
    this would be exactly like napsters shit except you get to keep your hard drive space.

  37. This makes sense. Let’s keep in mind that you don’t “own” the music – the copyright holder does. You simply purchased a license to use it.
    Subscription model is a license as well, with stricter terms limiting use. As long as I can move that song to my iPod and authorize it for use on other iPods and computers, I’m down with that. Timing is good, too, as there is talk that BitTorrent-like functionality will be included in the next OS, allowing for bandwidth sharing across subscribers. And maybe Apple take it one step further, allowing for tiered subscription rates based on the amount of bandwidth I provider to fellow subscribers.

  38. Subscriptions are not the way to go. And besides, there is not enough good music out there to get your moneys worth. The music industry is a joke.

    MDN Macic Word: “STOP”, as in STOP with the MDN Magic Word!

  39. Matrix3,
    “It really won’t be up to Apple – the record companies would want to get as much income as possible…they wouldn’t let Apple do this without a major revision to the contract.”

    – Um, they also wanted a tiered pricing model, but Apple didn’t let them do that either. I think you underestimate Apple’s bargaining power.

    Based on the subscription model I have to pay and pay and pay and pay to keep what I love or use to love.”

    – Not exactly. You pay for new music that you may not need to keep forever. You can still purchase separately the music that you do want to keep forever.

    I think you’ll find that the general approach to music tastes is shifting. Artists and styles of music are not staying popular for two decades anymore. People like certain styles of music or certain artists for a year or two and then move on. Instead of investing a lot of money on songs that may not be interesting a few years, or even a few months, in the future, people are wanting to invest their money in staying current.

    “Do you think the record companies will want to limit their income by giving a discount for those that want to purchase their music?”

    – Who says that the record companies would give the discount? I imagine it would be Apple that gives the discount, just like they do with the free song each week.

    “Actually the more I type this response I think those that go with the subscription model are just short-sighted.”

    – The subscription model is only for certain people, but for Apple to ignore it altogether is short-sighted.

  40. A choice of over 3 million streaming tunes would save us the massive ongoing headaches we currently experience in terms of sourcing music, compiling playlists, and burning them to multiple discs for multiple stores. The holiday season alone would be well worth it.

    I’ve tried this, created 10 cd mix for play at the local pub.

    You know what? All the songs have different volumes. It’s a hassle adjusting each song, blasting/quiet/blasting quiet.

    One has to change the DRM to MP3 then run it through software to adjust the volume level, takes hours on a Mac Tower.

    Your better off using XM or Sirus and then streaming that. Change the music on the fly once in awhile.

  41. I prefer to own my music.

    But…

    I prefer to rent movies – unless it’s a really good one. A subscription service for movies would be OK.

    $20 a month for all-you-can-watch movies/TV shows could work.

  42. “why pay $10 a month when you could download all you want for free!? Downloading music illegally is just too easy.”

    Um, because some people actually have morals and understand simple concepts like that stealing is wrong? Grow up!

  43. “As a recording artist with songs for sale on all major services, I can assure that subscription models stink.

    I personally end up getting a fraction of a penny for each of my songs that someone “rents.””

    Folks! THIS is the thing that everyone seems to forget about. Yeah, sure, a subscription is CHEAP, but it SCREWS all the artists…maybe even worse than ever.

    If we want great music, you’ve got to quit forgetting about the people who MAKE THE MUSIC! We need to put the ARTISTS FIRST…like they’re doing over at tuneflow.com and other similar music sites.

  44. Yes for video, because renting video, including the all-you-can-eat monthly “subscription” method, are viable models in the “real” world. People expect to “rent” videos, not buy them. Apple realizes this, and their future digital online video store will support what people are comfortable with, renting videos versus buying them.

    However, people have never “rented” music in any significant way. There are no music rental stores in the physical world. Music listening is a passive activity, and we listen to the same favorite songs dozens of times (not just once like most videos). So Apple will not introduce a music rental service.

  45. You are no hero if you subvert the labels, you’re a crook.

    Oh, please. Blind obedience to the law is for sheep. – sheep who don’t understand how legislation is bought. Subverting corrupt law should be considered a noble duty.

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