Why Apple’s Steve Jobs will never offer iTunes music subscriptions

Apple Store“Don’t hold your breath for music subscriptions from Apple’s iTunes music store — Steve Jobs will never offer them. Renting music flies in the face of consumer behavior,” Leander Kahney writes for Wired.

“Consumers want to buy music, not rent it, and a big part of Steve Jobs’ genius is his firm, intuitive grasp of how consumers behave, and tailoring Apple’s technology to accommodate it — not the other way around,” Kahney writes.

Kahney writes, “Nonetheless, there’s a lot of speculation that Jobs may soon offer subscriptions, mostly because he’s currently renegotiating contracts with the record labels, which love subscriptions because of the steady, predictable revenue stream.”

“I just canceled my subscription to Microsoft’s Zune service after about three months as a subscriber. I finally realized that I’ll never change my music-consuming behavior to fit its business model,” Kahney writes.

Kahney writes, “Like all subscription services, Zune is analogous to a cheap Vegas buffet. At first you stuff your face like a pig, but when you go back, there’s nothing you want to eat. After an initial burst of activity where I downloaded everything I could find, my usage dropped off a cliff.”

“I thought the Zune subscription service would be good for finding for new music, but it isn’t at all. I’ve found more music from TV ads than I found through Zune,” Kahney writes.

Full article here.
Oh, so that’s who bought that Zune!

As we wrote as recently as last week: 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.

60 Comments

  1. Beware, just because the process started out with people owning their music doesn’t necessarily mean that will continue. The subscription model could very well make sense, as technology allows the worlds music to be found and tasted from one location, and if the model expands to include movies, TV, etc, basically on demand, then this could very well be an economical and sought after source of entertainment model.

  2. “Don’t hold your breath for music subscriptions from Apple’s iTunes music store — Steve Jobs will never offer them. Renting music flies in the face of consumer behavior,” Leander Kahney writes for Wired.

    Journalists should know better than to use “never.” Steve Jobs has shown that he will change the course of Apple when it is advantageous, either from a strict business standpoint (i.e., contracts with the labels), or based on evolutions in technology or the marketplace. Video on a portable device like the iPod? Never!

  3. MDN word= Because. Because I don’t to rent music! Because I don’t want to rent Movies or TV shows. I already pay way too much to the other greedos…cable, and I don’t even have time to watch the junk they pass off as entertainment.

  4. Never say “never”.

    I agree with the MDN take and with the above posts, but we are automotons and can exhibit rational economic. If at some stage in the future, subscriptions services were to become absolutely dirt cheap, say $1/mth, perhaps our buying behaviour might change.

    Just sayin…

  5. If it’s the selling of songs to potential customers outside the country that is the stumbling block preventing this, do these restrictions apply when renting?

    It may resemble radio broadcasts. A country may be prohibited from rebroadcasting, but unless you’re in such countries as Cuba or China, there’s no law against listening to them from the source — unless you’re the BBC.

  6. Awhile back MDN did a story on a black college girl (in the east I think) who said she was going to buy a Zune because ‘everyone has an iPod and she wantrd to be different’.

    I wonder what ever happened to her? Is she still ‘different’? Has she found someone to squirt with?

    Sorry off topic.

  7. I want to own, but first I want to rent to explore and find stuff I like. The problem with previous approaches are they were an either/or proposition. Too narrow minded. iTunes has a diverse catalog which allows both the popular (breadth) and eclectic (depth) exploration that can’t simply be done by turning on the radio to find songs.

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