Analyst: Apple has good reasons to reject music subscriptions on iTunes Store

Apple Store“CNN Money has a fairly thin story about how the CEO of INTENT MediaWorks believes Apple is preparing to offer a subscription music service within the next six months,” Blackfriars Communications’ Carl Howe writes for SeekingAlpha.

“I think the real motivation behind the subscription idea isn’t Apple, but the record companies,” Howe writes.

Howe writes, “The concept of subscriptions on iTunes appears about as perennially as weeds. But while some consumers may find the concept attractive in theory, for Apple, this strategy just doesn’t work for three reasons:”

1. Subscriptions require Digital Rights Management [DRM] that turns off consumers
2. Labels would have little incentive to create good products
3. iTunes’ existing subscriptions create more satisfaction

Howe writes, “In addition to the three reasons I listed above, Apple’s iTunes has about two billion revenue reasons this year to pursue its own course in music subscriptions and to reject ‘me too’ rental services. Perhaps that’s reason enough.”

More in the full article, including discussion of the three points above, here.

[Thanks to MacDailyNews Reader “LinuxGuy and Mac Prodigal Son” for the heads up.]

Related article:
Music labels to ask Apple to add subscription service to iTunes Store – April 13, 2007

45 Comments

  1. …and I’m tellin’ ya, eMusic is a great little music service too. You do need a subscription, but the prices are reasonable and the service is geared toward independent labels, but also has major labels/artists. I like it.

  2. I already have a Octo Pro, so in theory I would be selling two of them and retiring on the cash from selling all that DRM free music.

    Anyway it was just a idea what people could do with subscriptions.

  3. Yes and subsriptions have worked so well up to this point! Of course the greedy SOBs figure it will work better if they can latch onto the most popular player to do them with. Because the real reason the iPod is so popular has nothing to do with the fact that you own, not rent, what is on it.

    Man these guys are idiots. I would like to know how you get to be the big CEO with the big Paycheque and still be so effing dense! Cause I can play dense if I need to, and come up with half-assed ideas as well. Where do I send my resume? This working hard and being held accountable for my performance, for puny pay, is starting to wear a little thin.

    MW: help, as in will someone help these nutjobs get a clue

  4. I agreed that it did not make sense till i saw the statement on this site the other day saying “maybe not music but movies.” Apple could become the ultimate alternative to blockbuster and netflicks.

    I pay $20 a month for a subscription to blockbusters so I can stop and get movies on the way home and hold onto them till i finish them. I skipped Netflicks for this reason alone – I never know what i want to watch till the last minute. Apple can let me start watching my show in minutes.

    I would drop blockbuster like a bad habit. I still would buy DVD’s for keepers, but I would never rent another one if I could do it from an Apple TV instead.

  5. macaholic: “Yes and subsriptions have worked so well up to this point!”

    – Irrelevant.

    “Because the real reason the iPod is so popular has nothing to do with the fact that you own, not rent, what is on it.”

    – This statement is more true than I think you realize. The success of the iPod does in fact have little to do with how people acquire their music.

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