“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
all subscription services breed is piracy.
I bet the last time that Windows Media was cracked you saw a huge increase in the “trial subscriptions”. You can download a lot of music from napster during a trial, in my case, close to 4 gig. All drm free now.
not for music.
but definitely for movies
@Wiseguy
you forgot #6. Go to jail for copyright infringement for selling music you don’t a mechanical license for.
As I said on CNN page, why should we believe the CEO of INTENT Mediawork? The first, second and third rules of negotiating with Apple on any future project are to learn to shut up about it, to learn to keep a secret and to learn to shut up about keeping a secret. Will a CEO involved in potentially multi-million dollar deal be idiotic enough to jeopardize it for a few minute of fame?
I doubt iTunes would use an eMusic subscription model. The model seems geared to small acts that are willing to accept little or no payment per track in order to get their music heard. This is only true of a small portion of acts that distribute via iTS. The majority of them probably are not interested in selling at no profit simply to increase volume. To accomodate this, Apple would have to have a tiered system, which sounds nice from a flexibility standpoint, but is just awkward enough to annoy most consumers. Even if it were a fit for some of the tracks, Apple is all about maintaining simplicity in the price structure.
I do not believe that the a universal rent vs own question is behind the relative lack of success of subscription models. There are people that are fine with not owning. Unfortunately, the majority of those people are also fine with not renting, but rather getting their music from the radio. Of the people that are willing to spend $10+ a month on music, it seems that a large majority of those prefer to own. For those that are willing to rent, at least a portion are spending their entire monthly music budget on subscription. So what if the store in question does not have all the music you want to hear? There are several genres that are not well represented (classical, jazz, experimental, electronic, etc). On the other end of the spectrum are people that spend a lot on music each month. They are more than likely to have a very wide range of musical interests and I doubt that any store that is based mostly on major labels is going to satisfy their tastes. More importantly, this group more than likely are collectors, so owning is probably pretty important to them. Basically, I think that subscriptions have a more limited appeal than the labels think.
…but as many have pointed out, a subscription service on iTS does not preclude the current model. The DRM issues seem like they could be a deal breakers, though, since Apple would like to move away from that. The other option, I guess, is streaming, which does not seem a satisfactory option.
you forgot #6. Go to jail for copyright infringement for selling music you don’t a mechanical license for.
Been there, done that.
With the money I’ll move to Switzerland or cruise the world on yacht , ha-ha.
But I like what artists do, so I won’t.
If Apple is actually working a “subscription” model, it will be for video. Netflix (and copycat Blockbusters) has a popular monthly fee for X number of movies at a time by mail model for rental. Apple could do something similar, except do it 100% online.
Apple business model for music is already working, with great customer satisfaction. There is no need to add a subscription option.
Are any of the current subscription services making any money? If subscriptions are so great for the consumer, how come everybody isn’t flocking to them? Yahoo! Music, BTW, just raised its subscription price. That’ll help.
Seems to me the music exec are trying to do what is done in other internet businesses–its called parity. If they (the music execs) can get the biggest and baddest on the block to join the lame ass subcription idea, this would put them back in charge because now there is no difference between ITMS and the lame ass subscription. Now as soon as they let us rent movies, I will be one happy camper
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