“The idea that a credible rival to iTunes could appear from nowhere and compete head-to-head with Apple (as Microsoft has clearly failed to do) seems far fetched to say the least. But never mind, it’s happening,” Robin Bloor writes for IT-Director.
MacDailyNews Take: No, it’s not.
Bloor continues, “The company that is presumptuous enough to believe it can do this is Omnifone and, given the reports that emerged from the recent 3GSM conference in Barcelona, the press believes it too.”
MacDailyNews Take: Because most of them can barely read press releases, much less analyze what’s in them.
Bloor continues, “Omnifone has already sewn up deals with 23 mobile network operators, that have subscribers in 40 countries, giving it a total customer base of 690m subscribers. That’s a potential customer base of course—not all of those subscribers will choose to use Omnifone…”
MacDailyNews Take: Hardly any subscribers will choose to use Omnifone.
Bloor continues, “You can do a blow-by-blow comparison of iTunes and [Omnifone’s] MusicStation, but no matter how you toss it up and catch it, it is difficult to believe that MusicStation isn’t going to take a big share of the digital music download market.”
MacDailyNews Take: MusicStation isn’t going to take a big share of the digital music download market. Believe it.
Bloor continues, “A big reason why the Music industry is backing Omnifone is the music by subscription model it operates. The idea is that you pay a regular subscription charge as part of your phone bill and you can have ‘all you can eat’ in terms of music. (The initial roll out will offer 1.2 million songs). The music companies tend to think like this: With iTunes the average user buys around 20 tracks a year—equivalent to maybe 2 or 3 CDs and generating $20 in revenue. With a subscription model at, say, $3.50 per month, the revenues per person will above $40 (twice as much).”
Full article here.
[Thanks to MacDailyNews Reader “nerdbrain” for the heads up.]
MacDailyNews Take: The music by subscription model is a proven failure. People want to own their music, not rent it. Stop paying Omnifone and you’ll have nothing. Additionally, Bloor’s numbers do not even come close to adding up. Let’s do something interesting and look at the actual facts: Omnifone’s subscription service will be £1.99 (US$3.90) per week, not month. So, it actually costs US$16.90 per month on average or $202.80 per year. In other words, Omnifone is 70% more per month than the beleaguered Napster subscription failure that currently charges (US$9.95/month).
The mobile phone networks are suckers because they, like every iTunes Store victim on the planet, want to control the customer instead of giving customers the control they want — even to the point of stupidly buying into this repackaged, over-priced, proven failure that’s called “Omnifone” this time instead of “Napster.”
Apple gives customers what they want while other outfits want so badly to reap a weekly/monthly payment ad infinitum that they keep trying to ignore reality. The mobile phone companies are deluding themselves with visions of recurring weekly charges that simply aren’t going to exist in worthwhile numbers because people don’t want what they’re trying to sell no matter how badly they dream of selling it.
Related articles:
BBC incorrectly reports Omnifone music subscription price (plus: why the phone networks are suckers) – February 13, 2007
Omnifone to challenge Apple’s iPhone, iTunes Store – February 12, 2007
Beleaguered Napster hires UBS to evaluate possible company sale – September 18, 2006
Beleaguered Napster circles bowl, subscribers drop 7 percent, Gorog won’t rule out sale of company – August 03, 2006
Free, legal and ignored: Mac- and iPod-incompatible beleaguered Napster dying at colleges – July 06, 2006
Napster does the math: layoffs commence with 10-percent of workforce lopped off – January 25, 2006
EMI Music Chairman: Music subscription services like Napster and Rhapsody haven’t beeen huge – January 23, 2006
Report: Napster executives do the math, consider selling or shutting down, layoffs imminent – January 16, 2006
Do the math: Napster posts $13.6 million second-quarter loss – November 02, 2005
Napster: the only thing missing is the sock puppet – August 04, 2005
Napster, other Windows Media-based music services ‘chasing a niche opportunity’ – June 29, 2005
SmartMoney: Napster is a snooze, gushing money and renting music is un-American anyway – July 06, 2005
Napster To Go Soon? Reports $24.3 million net loss on $17.4 million net revenue – May 11, 2005
Napster is a joke – April 05, 2005
Users thwart Napster To Go’s copy protection; do the music labels realize the piracy potential? – February 15, 2005
Why ‘Napster To Go’ will flop – February 03, 2005
The de facto standard for legal digital online music files: Apple’s protected MPEG-4 Audio (.m4p) – December 15, 2004
Napster 2.0 posts US$15 million relaunch loss – February 08, 2004
Hey here’s a funny thing. I just read that South Africa, which is one of MusicStation’s first rollouts, has almost no home desktops and there’s almost no broadband in the country. Apparently the only digital music there is mobile digital music. Means there’s no iTunes reach there. Corr, bet that gets Steve scratching his head. $500 device for the Soweto townships probably won’t work. Wonder if India or China share any similarities? 2.5 billion people between them? Might be worth investigating if the iPhone is to get any traction outside the States (abroad).
Don’t get me wrong guys, I think the iPhone looks stunning. And when it finally materialises I’ll probably get one cos I’m not short of a few cents. However not everyone can afford a Rolls-Royce and not every country has got roads – if the only issue with MusicStation is the price then it’s bound to come down. But I reckon it’s much better psotioned and aligned and it’s better distribution will ensure it eats the majority of the main market. Perhaps the Omnifone guys don’t care about flash expensive high-end handsets?
Hey sorry to bore you all, but I do find this an interesting subject. Would it not be true to say that:
1. Subscriptions services are harder to implement than pay per track?
2. Pay per track could be easily added to a subscription service?
3. Omnifone could easily offer a pay per track service too?
I think it comes down to handset reach and the number game therein. Good luck to all parties I think this is a great thing to watch. Let the battle commence!
Man, if the “Music Industry” is backing it, consumers are going to gobble it up for sure!
What? I’m not giving the music industry enough money?!?!?!?! OMFG!!!! Please, let me make it up to you by subscribing to your scheme to give you money!
Uh, douchebag, it strikes me that the math you lay out to explain how the music industry makes more $ is the same math many consumers will use to decide
that they DO NOT want it. Sure, you get a huge selection. However, even though 1.2 mill tracks are available, what portion of that actually appeal to a particular
consumer? So, the average consumer could spend their $20/month music budget on tracks they actually want to hear OR spend 2-3x that much to get hundreds
of thousands of tracks they will never listen to.
Tough one. Oh, but since you explained that the Music Industry will make more money this way, sure. Why don’t I just write a check now.
Bonesy,
Here is a question for you.
Why do the digital music retailers, with the exception of iTunes Store, and every cell phone provider on the planet have such a raging hard on for subscription services?
Here’s the answer.
If it takes hold, it’s a license to print money.
The service in Canada will be $20 CD per month or about $17 USD.
Oh that people were stupid enough to buy into it.
I hope you haven’t invested your life savings in this pipe dream Bonesy.
MacDailyNews Take: MusicStation isn’t going to take a big share of the digital music download market. Believe it.
Not that I necessarily disagree, but seriously… does ANYONE actually believe MDN’s obscenely biased opinions?
With 690million subscribers who might subscribe to musicstation, even if only 1% were to do so, that’s still 69million subscribers… Is that competition for iTunes? maybe not equivalent, but it’s certainly competition.
Also, MDN’s constant assessment that “People want to own their music, not rent it.” is based entirely on their biased opinion… Certainly many people, easily millions, if not tens of millions are perfectly content to “rent” music, just as they “rent” access to TV programming via cable (why TiVo, which I do use, STILL hasn’t turned a profit in 8 years of operation), or “rent” access to radio programming via XM and Sirius.
It seems incredibly obvious (to me anyhow) that the primary reason that iPods outsell all the also-rans is not that people prefer to buy their music over rent it, but because people simply prefer the iPod over the other players… I know about 30 people with iPods, and I have asked them all if they would prefer to pay by the song and keep it forever, or pay by the month and only be able to listen as long as they keep paying. about 1/3rd said they would prefer to pay by the month – most citing because it would save them money in the long run, and about 1/3rd said they have no preference, and about 1/3rd said they prefer to buy CDs and rip them. Of those who said they would prefer to pay by the month for an unlimited selection of music, I asked them all why they have an iPod instead of one of the others, and all but 2 of them said they either did not like the way the others that they had seen worked, or because the iPod is just more cool. The other two have iPods because they were gifts. I asked if they would have been equally happy with a Creative Zen, and they both said “probably.”
Keep in mind that all of these people are professionals being paid at least $40,000/year or more in Florida, where the cost of living is well below the national average.
Giving MY personal opinion… I have a 30GB iPod… it’s about half full of all the songs ripped from my collection of have hundreds of dollars worth of CDs, most of which were bought in the ’90s. In the past 2 years, I have spent maybe $100 total on CDs and about $50 on iTunes in the same amount of time. I don’t drive much, but when I do, I prefer to listen to my iPod over the radio, just because I HATE radio commercials almost as I hate radio announcers. On short trips to the store, I leave the iPod at home, and the radio off. Note also that most of the music I like, though available on the iTunes store, is virtually NEVER played on any of the 30 or so radio stations where I live. If I DID drive often, I would subscribe to Sirius or XM as both have commercial free stations devoted to music I like. On the other hand, if given the option, there is no question at all that if I could, I would instead pay that same monthly amount to pick those songs I positively like, and have the iPod filled up the rest of the way with songs that I might like because it is similar to the music that I explicitly selected. If any of those suggested songs I did not like, I would simply skip them… In fact, I would really like to have something TiVo-like to be able to simply give a thumbs-down to suggested songs I do not like. If down, it never gets played again and is replaced with another suggestion at the next syncing.
In 10 years I doubt my music tastes will be precisely the same, and even if they were, in the scenario I suggest, I would certainly have received at least $1300 worth of music in that time.
I already pay $75/month for satellite TV, and even with TiVo, I don’t save shows more than a couple weeks. I pay $45/month for broadband. I pay $35/month for Vonage. I pay $85/month for family plan cell-phone service. Would another $13/month made a real dent? No, not at all.
Hey Bonesy…where the hell is this Sowhatho place anyway…? ain’t no goddam place I evver heard of. Aincha never heard of the world football and world baseball series…we are the world ya numbskull! Hell where the hell d’ya think Indiana an Chinatown are anyway.
You ain’t from ’round here are ya boy!
You bring ya noo-fangled gizmo’s to ma town boy, I’ll set the dogs on yer!!
Jed…git the shotgun!!
That is called radio. It’s been around for a while. Want a special song? Listen to your favorite channel and request it. Want to listen to only your own songs? You will be unlikely to discover NEW material.
Any idea how much users will be charged for tracks when the iPhone Finally launches?! do you think you’ll be charged the same as you would be online? Do you think operators and phone networks are going to happilly sit by let people download over-the-air for free – no. they’ll charge data transfer fees and standard rates. End of the day, if the iPhone launches without ANY glitches, works perfectly as a phone and the downloads from iTunes work perfectly (all highly unlikely) then users are going to have to pay significant data charges for itune tracks.
Anyone posting here got any idea how the mobile music industry works? any thoughts on consumer trends, download purchase habits, adoption rates or current levels of provision? thought not. standard Mac evangelist knee-jerk reaction.
And lets be honest, Apple has no experience whatsoever in the mobile phone market. no competition from Motorola, Nokia, SonyEriccson, Samsung, LG… oh.
It always cracks me up whenever mac fans get a chip on their shoulders about some new service rivalling iTunes of the iPod or anything Apple. “Oh god, no it’s rubbish, it’ll never work because it’s not mac. who do they think they are?! *cue hair-pilling, long faces and gnashing of teeth*.
hahahahahahah
Hey Joe90
1 million songs 3/4 maybe you do want to hear, maybe not = choice, yours to do with as you wish. So if someone chooses different, and does no one else harm…why diss it cos’ it ain’t yo mojo?
… reference-driven HiFi – no contest, but cd’s…? vinyl still surely, for the purists?!
…white ear-buds and wires… 21st century tribal accessories…well if you must…of course no one else makes ’em in white do they…
…anything apple does?….boy, have you been sheep-dipped…independent thought?…bet your thinking..Why oh why didn’t I take the BLUE pill
…over complicated gadgets?…the comms world…smart funksters on the move who can rapidly assimilate complexity into their lifesyles and thrive on it…simpleton.
just my thoughts on choice over domination in/of the free world.
Of course, people understand that the time needed to establish a wireless link to download tunes to iPhone is a service that costs money. However, whether a person has a subscription music service or a pay-for-only-music-you-want service, the user is still obligated to pay for the wireless service. Simple, huh?
Most businesses may offer 1,250 or 1,500 minutes per month for a flat fee, meaning you can choose to download as many songs as you like up to a maximal set of pre-determined minutes without having to pay incrementally for the time needed to download a tune. However, if each incremental time to download actually costs 10 cents per minute do you think that this “added expense” will be a financial hardship to many people? In addition, perhaps the cost of iPhone web browsing is part of a monthly fee that includes access provided to your home computer so there is no added cost at all. Also, some service providers only charge $5.00 per month for monthly VoIP. That’s not a whole lotta cash either for internet access, eh?
No one outside Apple’s inner circles knows what the exact costs of services will be. I know nothing about the pricing plans, but you obviously know even less than I do. That makes your statements absolutely idiotic and completely moronic. Are you still laughing, cornsax?
Magnificent piece! Now, explain how empirical evidence (i.e. Napster) contradicts your perfect theory. Hmm?
Music doesn’t worth a penny nowadays. People just trash their CDs after a few years. Let me ask all of you, how often you listen to your 4-6 years old tracks. Owning it just satisfy your wish, not a practical way. I would go for a reasonable subscription fee when I can listen to the latest tracks without even worrying how much i need to pay. If this doesn’t work in US or Europe, then go for Asia, people there like “all you can eat” model and even bigger market. Be Global! How many of you know about “Melon” and how many of you know about the money made by RingBack Tone “subscription”? Be real guys!