“Apple Inc. Chief Executive Steve Jobs indicated on Wednesday he is unlikely to give in to calls from the music industry to add a subscription-based model to Apple’s wildly popular iTunes online music store,” Duncan Martell reports for Reuters.
“‘Never say never, but customers don’t seem to be interested in it,’ Jobs told Reuters in an interview after Apple reported blow-out quarterly results. ‘The subscription model has failed so far.’ His comments come as the company he co-founded gears up for contract renewal negotiations with the major record labels over the next month,” Martell reports.
“Since Apple launched iTunes in 2003, it has sold more than 2.5 billion songs and now offers increasing numbers of television shows and movies,” Martell reports.
Martell reports, “Many in the music industry hope iTunes will ultimately start, in effect, renting music online, so record companies can make more money from recurring income. But Jobs said he had seen little consumer demand for that. ‘People want to own their music,’ he said.”
Full article here.
We’ll reiterate a recent Take on this subject: 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.
I subscribe, and will continue to do so. I don’t have to store it, I don’t have to back it up. When higher quality music comes out, I can just listen to that instead. I can listen to anything on demand on a whim. It’s a fixed cost. I have a stack of CD’s that I have no idea what to do with cos it’s easier to stream from the internet.
I have no idea where to start with the “costs this much for 10 years” argument since it assumes that you don’t increase your music collection, avoids backup and storage costs. etc…. Such a small minded opinion.
I have a subscription to LimeWire
I don’t get mdn agruement either.
Lets say I listen to 100 songs this year. That is 100 dollars. A subcription is maybe a 120? a year.
Put next year I add another 100 songs so I now own 200 hundred and it cost me 200 dollars.
same every year for 30 years would be 36000 songs owned for a price of 36,000 dollars. Meanwhile the subscription would be the SAME PRICE and yet I had access to more then 36000 songs.
One question for the record labels:
How many music rental brick and morter stores are there?
And one follow up:
If the subscription model worked, wouldn’t there be as many music rental stores as there are Blockbusters?
I think you can answer your own questions.
MDN Magic Word: all as in ‘none at all’
Does anyone remember the talk of having movie aliases in your iDisk? Thereby allowing you to keep the movies you have without clogging up hard drive space. If a suscription movie/tv service was in the works, this might be the perfect way to go about it. Once broadband speeds ramped up to speed anyway.
Everyone seems to equate music with single songs. Not all of us serious listeners want “songs”. I have $50K invested in my stereo system. I intend to “invest” in my music. I do not want to rent my music! It’s something I expect to listen to for a few dacades yet.
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I haven’t listened to children’s music for 30+ years.
Rent music? No effing way… I’d rather buy the songs I like and own them forever.
MDN Take: “Business models that fly in the face of human nature are doomed to failure.”
– Pffft, as if MDN understands human nature. Human nature is a concept that is constantly being redefined. Business models that hold rigidly to a static concept of human nature are doomed to failure.
It has to be said again and again. FM radio is free and you no doubt already own a receiver.
On top of that, 90% of people in the computer owning community live in an area where they can listen to the music that fits their musical tastes over the airwaves. Hear something you like, buy it from iTS. The test drive is free as in beer.
There is no need whatsoever for a subscription service unless you want one for a couple of months to facilitate your acts of piracy.
People get lost in this “rent my music” issue. Correct me if I’m wrong, but when you have a subscription service you can listen to all the music you want as long as you pay, THEN if you want to buy the music you love, go ahead, no one is stopping you, buy it and have it forever! The two are compatible! Yes, you are paying an extra fee per month, but you aren’t paying to listen you “your” music–you’re paying to have access to millions of songs and listen to them whenever you want, at no risk. It’s like satellite radio, you pay a monthly charge, but you don’t have to listen to what they’re playing, you can listen to what you want.
People here claim to be so “ahead of the curve” yet I think they miss the point of what subscriptions can be. Maybe someone can make make a case about how subscriptions are terrible, but you can’t use these tired arguments:
1. Subscriptions are bad because they’ve failed to catch on
2. I don’t want to “rent my music, when I stop paying it’s gone”, yada yada
3. Subscriptions are bad because SJ says so
What say you?
What ya got to lose, Stevie McPevey. Go to any Blockbuster and tell ’em you’d like to buy instead of rent. They’ll accomodate ya.
If you want a subscription service, let Apple know. That way Steve won’t be mistaken.
I do get the MDN argument. I was born in the 50’s went to high school in the 60’s and University in the 70’s.
The music I listen to now is the music my parents listened to in the 50’s and the music I listened to in the 60’s and the 70’s. I bought that music in 45’s, LP’s, the odd 8-track, cassettes and CD’s. That was just like subscription services The Labels want today. Recurring payments for the same music.
Kids nowadays just have to buy an electronic file once.
Take it from me, the music you grow up with is the music you listen to fro the rest of your life.
Pity the poor bastards that grew up listening to disco or rap.
I don’t want to rent my music either. But, I do want the ability to listen to an unlimited amount of music for a monthly subscription to identify what albums I want to buy.
For all those who want to advocate for the subscription model.
A few major points on why this is not the best option long-term:
1 – For those advocating subscription services they seem to think the current price will remain the same. You can look at current cable bill pricing to confirm what I’m saying.
The only reason why the current rates haven’t increased is no one has adopted this method of purchasing music.
2 – You are assuming that the Subscription store will be open and remain in business.
What happens if the store you have this program with shuts down? What happens to the investment you’ve made?
You have to start all over and at what future price?
3 – This is more of a logic question. If the subscription service was good for the consumer do you think the Music companies would be pushing as hard for this model?
My 2 cents.
MDN take is exactly right. I also think subscription-based services are a bad deal for the artists. I’ve never understood how the revenue is distributed to the people who actually create the content, if the “sale” (if you can call it that) is through subscription. A customer could download 10,000 songs during the month or he could download 10 songs. If the rate is $10, how is that amount divided to compensate the artists? Something tells me they will get a raw deal at the expense of the record companies getting rich.