Music labels to ask Apple to add subscription service to iTunes Store

Apple Store“The world’s biggest music companies are expected to ask Apple to introduce a music subscription service to its iTunes digital media store as part of negotiations to renew their agreements with the computer company,” Joshua Chaffin reports for MarketWatch.

Chaffin reports, “Those discussions will begin in earnest next week when Universal Music, the largest record company, sits down at the bargaining table with Apple. Universal’s competitors, Sony-BMG, Warner Music and EMI, have either commenced talks with Apple already or are poised to do so, according to people close to the matter.”

“Executives at Universal and other labels believe a subscription service could prove more lucrative for them than iTunes’ prevailing model of charging consumers 99 cents per track because it would increase consumption of music. It would also entitle the labels to a share of monthly payments, in addition to small licensing fees each time their songs are played,” Chaffin reports.

Full article here.

[Thanks to MacDailyNews Reader “Another Irish Dude” for the heads up.]

MacDailyNews Take: Business models that fly in the face of human nature are doomed to failure.

Human beings like to listen to favorite songs over and over. They like to own these songs, so that they can play them over and over. They do not want to pay someone an unending monthly rate in order to be allowed to hear their favorite songs.

1,000 excellent songs costs $990 (or $1290 for DRM-free, higher-quality EMI songs) for life, but to listen to them with a $9.99/month subscription plan for 10 years would cost $1199, for 20 years it’d be $2398, $3597 for 30 years, $4796 for 40 years, and so on – and that’s not even taking inflation into account! That subscription rate is going to increase over time, but once you buy a song, you own it for life at the price at which you purchased it — your deal gets better over time, not worse.

Now, for the limited amount of people for which a music subscription service would be welcome, we say, by all means, Apple should offer it – if it makes business sense (i.e. development and operational costs are less than profit potential).

Regardless of what happens, the fact remains: The labels want subscriptions to succeed because they dream of a recurring revenue stream, not because music consumers desire such a service. We can almost hear the greedy bastards in their music cartel boardrooms, “If only we could get them on subscription plans, if only we could get them on subscription plans…” Dreams of easy cash do not a successful business model make.

One more time: Business models that fly in the face of human nature are doomed to failure.

Now, for TV shows and movies, a subscription service makes perfect sense because it better fits the way people consume those types of content than does outright purchasing. Not to mention, where do you store all of that content that you own, but are only going to watch once or twice? Most people can count that number of movies they’ve watched three or more times on their fingers.

We want to buy our music and subscribe to a TV shows and movies plan via Apple’s iTunes Store.

62 Comments

  1. Great take MDN –
    I’m glad you spelled it out for those that think they are getting a deal with subscription based music.

    In the short term it LOOKS like a great deal but when you really look over the long-term it’s a rip-off.

    The Music companies are copying the cable companies business model of charging monthly fees and raising them when they need to increase THEIR revenues.

    Don’t believe for a moment that the Music companies won’t RAISE their rates every year.

    Music its what you want to be able to go back and play to remember the good times ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  2. I think it depends on what kind of subscription service they will offer. I love Emusic, and it’s entirely subscription based. But you actually own your songs forever. The subsctiption just lets you download a certain amount of songs per month, and it’s much cheaper than iTunes. If iTunes did something like this, I would be the first to sign up.

  3. There has been a lot of discussion about a subscription service for iTunes.

    Discussion is good. Personally, I don’t care for subscription for music, but I could see others might. Now, if we were talking about movies and TV shows, then I’d be interested. Combine that with the ability to order directly from an AppleTV and you’ve have a killer combination.

  4. Human beings like to listen to favorite songs over and over.

    Human beings also crave novelty. How many of us have bought a recording that we thought we like and then didn’t?

    Subscription is the radio of the digital age. Try it with little consequence; buy it if you love it.

    I think there is room for both models if they are well thought out – that just hasn’t happened yet for subscriptions.

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