“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.
Steve is a genius. The music labels – NOT!
1st post – again!
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.
“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!
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.
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…
Typo: “we are NOT automotons”
Hehehe…
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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.
Bought that Zune? MDN my 25¢ says Kahney was using a free review Zune.
What’s wrong with monthly based tax this is not “renting” music ..But the ITunes model is goog enough.
That’s the problem with the world. People are happy with goog enough.
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.
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.
Hurrumph, you’re rigth that’s the problem …
On a previous article, someone had a good idea of including a rental option with the .Mac account….
@irent2Buy
iTunes lets you listen to s asone for 20 seconds which helps a lot of people to choose. If that is insufficient, do what I do….go to many new stores which have listening stations. I go to HMV here in Canada and they let me listen before I buy. Great way to discover new stuff.
sorry…that would be…listen to a song for….
@ShadowMac
Typo: “we are NOT automotons”
Actually, and as long as you’re correcting, we are not [AUTOMATONS].”
@Buster 20 sec is not enough, I’m not remembering wich website but one allow to listen up to 1 minute.
You can easly imagine a shuffle web player who listen 20 sec per 20 sec.
That’s not hurting to code that …
Sure you could pay 1,000 for 1,000 songs, but that’s all you’d ever get to listen to. Like getting stuck on Jack FM. I get millions of tracks on demand, across all genres, and new releases every week. I am a music fan, so that option works best for me.
“renting” – I hate that term, is great for those who like to discover new music, or those in the business. For the price of a on sale CD a month, having access to 2-3 million or more songs at the click of a mouse is wonderful. Via a browser, Rhapsody.com works pretty well on a Mac, and they keep rolling out new features that are close to the Win app. Not being portable on iPod/Mac OSX is my one peeve, and that would require a client app. I’ve thought about loading XP to run a nonPod, but I just can’t bring myself to do that.
Now, a lot of folks aren’t into discovery. Most aren’t. The average person buys something like 1-3 CDs a YEAR, probably what they see on Oprah or Idol. Subscription probably isn’t for them. Audiophiles, you are probably out, too, because the sound quality will never be there for you, but then, ITMS is out, too. But the rest of us, the music loving fans, the one who care about new release Tuesday, Rhapsody is a good option.
The music industry should actually hate Subscriptions. I used to buy 6-20 CDs a month. Now, with Rhapsody, I buy closer to 5-6 a month, so less money goes to labels’ bottom lines and to record retailers. Plus, I’ll buy mostly hard to find items, stuff that’ll probably never make it to Rhapsody, or is limited in release. The combination of Rhapsody, and my rare buys help complete my long tail quest.
To be able to “rent” music … wouldnt some form of DRM have to be applied ? .. and wouldnt that DRM have to be wrtten in such a way that it would “expire” after certain conditions were met ?
And didnt His Steveness (just recently) hammer out a deal with EMI to sell music without DRM ?
Seems to me, the market is shifting toward non-DRM’d music, and not the other way around !!
Of course, the other music labels will hafta be dragged along, kicking and screaming before they see the light !
Stuck needle musico’s: The model is broke. We’re headed for broke. Force it on ’em and make them pay. Money for nothing, make them pay.
SJ: Oh no you don’t. We give ’em what they want. Value for money and gifts for free.
@oh my .. if you set a duration limitation it will take a week before the system will be cracked
(my 2 cent)
@ joe
love your sales pitch. don’t believe a word of it.
Since you love to discover, tell us what you’ve found lately!
come on, joe. we want to know about the 5-6 hard to find albums you borrowed this month.
joe,
How much do they pay you to write that crap?
Subscriptions would work if they were marketed as a way to wean your kids off of the P2P sites. It would be a cheap way to keep your kids in hot today, crap tomorrow music.
It would need a cheap player given away with a one or two year subscription at less than $10 per month. You would need good store software and good download to device software as well.
Only Apple could do this right.
The Labels could pay Apple’s cost plus 20% and keep their magic revenue stream going until they run out of money. No operator makes money on subscriptions.
I think it would work for very young consumers.
What is the point of heated objection to an alternate sales paradigm? A jounalist saying “he” would never use the full access monthly fee model, doesn’t mean that the remaining 300 Million Americans want to be locked into a “you want it, you buy it” model. That’s as silly as saying that Americans like to own their cars and not lease them. Some like to own, some like to lease – it makes no business sense to reject a leasing model just because a lot of people like to own.
Is the point that somehow a leasing model would destroy iTunes sales? That would be the only point from a stock ownership perspective, that profits would drop if the leasing option was offerred alongside the sale option like with Rhapsody. But, from a pure consumer perspective, it is a no-brainer to have more options.
I don’t think it’s advisable to say iTunes will never have subscriptions.
Remember back when the conventional wisdom was that Apple would never switch to the Intel platform?
“business models that fly in the face of human nature”… “human beings like to listen to favorite songs over and over” …
I don’t agree.
There are lots of different ways of listening to music out there, including the way a whole generation who grew up listening to radio, and who are still around, and own iPods, likes to listen: enjoying the variety without owning anything.
Try to find any music at a public library, even one with a large collection, and you’ll see how hard it is, because most of it is always out. Millions of people “borrow” music every day.
I don’t agree with your statement about video vs music either. I used to work at a large video store, and I saw so many people buying DVDs every day that I thought nobody wanted to rent videos anymore, and look at how successful NetFlix has been.
Music also takes lots of space on a computer, computer storage is becoming as much of a problem for music, as you suggest shelf space is for video.
I currently work as an Apple consultant. The most frequently needed computer peripheral I see: External Hard Drives. Every computer I see daily is filled with music, a lot of it free. I know, because Limewire is installed in just about every one of them. The most frequent user complaint: “My computer is slow”. The reason: a full hard drive.
It’s all about giving people a choice. There are many untapped markets out there, and Jobs is simply missing out on a potentially large one by not offering subscriptions. If done right, the subscription service might entice more people to pay for music.
People don’t want to pay for music, if they don’t have to. That, is Human Nature! And as of now, they still don’t have to. The music industry needs all the help they can get and no “business model” should be out of the question.
iTunes should offer both: subscription and purchase, and should have done so from the beginning.
I subscribe to MS music service and I own a Zune. I like both of them very much, for me it is cheaper than buyning all the music I want to have. Think about it 1.5 milion songs, and growing for $15.00 a month.
Just to let you know I had an ipod, it was a pain.
just think… someday, when Zune Marketplace folds, you’ll have… nothing.
how was your iPod a ‘pain’?
@Joe…
I understand that you think that “renting” is a good way to discover new music. There’s an easier way, and it’s free. It’s called the radio.
@ Jim – TIV
Touché!
-c
Rent music? That sounds about as fun as renting pizza.
Apple will adopt a full-featured subscription service in a few years – all the music, movies, music videos, TV shows, and games that you want, whenever you want it, streaming to your Mac/AppleTV/iPhone/iPod any time you want it.
why do the limit to digital content, you can apply the same model for the whole market
car, house, fashion wear, perfums etc … (sorry just my french touch)
“do they limit”
“That sounds about as fun as renting pizza.”
Which is not nearly as much fun as wearing pizza. Rented or not.
“Rent music? That sounds about as fun as renting pizza.”
So? I rent beer……
@spec19….why are you trolling here? You only say this to stir up crap….idiot.
Buying music is for suckers. You get way more music for much less money if you rent it, and the rock-solid, controlled-by-only-one-company ‘WMA’ format is a very sound choice (pun intended) for long-term use. Why use independent, industry standard formats when Microsoft can do it all? I say let ’em. You know what they say about too many cooks…
Lovin’ the Zune Marketplace!
Your potential. Our passion.™
You’re right about radio. There’s a ton of music to be discovered on the FM dial. Let’s see there’s Britney Spears, and Christina Aguilera, and some American Idols, then there’s Britney Spears, Christina Ag…
I haven’t listened to a single FM music station for more than a 20-minute session in over ten years. Radio died.
you have obviously never clicked on the ‘radio’ tab in iTunes. there are hundreds of stations that play music you’ve never heard of.
@Jim you’re wrong to be listened on the FM you must be famous
Who wants to rent their music? Apparently nobody…
http://www.buzzdash.com/?page=buzzbite&BB_id=14392
Lagana sez: “business models that fly in the face of human nature”… “human beings like to listen to favorite songs over and over” …
I don’t agree.
Well, the market certainly does, and that’s the thing that matters here.
@David
I agree with the test no one want to rent musik but subscribing is not renting
@Alexandre
Can you explain? How is subscribing not renting?
Subscribing is possession while renting is not.
Coud someone with safari browser could tell me if my prototrype is well accessible
http://avant-garde.no-ip.biz
Thanks
“your deal gets better over time, not worse.”
Actually MDN’s math is flawed. Buy 10,000 songs today to fill your iPod or invest the same amount of money you’d spend on those songs and you can fund your music subscription for life on the earnings from that investment (and then some) with the added benefit that you get to have all the new music released in your lifetime and can update to better quality (say lossless) versions of your old stuff.
It may not be there today, but the model 10 years from now will be rental, access to the entire catalog, downloaded wirelessly, favorites cached locally, one fixed price per month for all songs, revenues divided among labels based on what you actually listen to.
Apple can either lead the way there, or get out of the way for the next leader in the portable music industry.
.
Been there. It sucks.
I am using http://www.ruckus.com which offers free subscribe music for students.
In the beginning, I downloaded all the albums of some bands I already know. Then I downloaded some albums of new bands I listen to the radio (good radio, of course: RadioParadise). Then I started using it less and less. Why? Because…
– crappy web experience
– crappy download manager/player interface
– can’t put music on iPod
– inconsistent naming of the songs
– missing songs on albums (!?!)
– it doesn’t help you at all find new stuff. If you want to find new music (w/o using a good radio service, like pandora or RadioParadise), you use allmusic.com . But ruckus.com… horrible…
– you need to use the web interface to select downloads and browse collection, then you need to use the player (standalone app) to handle your music
– you cannot preview the songs on the web. Yeah, it’s free to download it and listen to it and delete it if you don’t like it, but what about my time?
Pluses:
– great value: $0.
That’s about it.
“you cannot preview the songs on the web. Yeah, it’s free to download it and listen to it and delete it if you don’t like it, but what about my time?”
That seems more a comment on the ruckus service than the rental model.
After all the steps would be exactly the same buy or rent in iTunes as they are today, only in one case you get as much music as you like but only for as long as you subscribe vs getting a more limited selection which you own forever.
I really appreciate all these people who seem to know what we all want. Apparently we don’t need to bother deciding for ourselves.
Discover Music:
Ulver For the love of God. Type O Negative and XTC were involved in a horrible, horrible automobile accident.
As a Canadian, I know that I’m going to be on the piracy blacklist soon, so I’m just going to download all my music on Limewire.
“That seems more a comment on the ruckus service than the rental model.”
You might be right.
But beharior-wise, I think there would be similarities. I would still download a lot of stuff from known artists, I would still get saturated at some point and I would stop listening to those songs very soon.
There is no successful music rental service. And it looks like Steve Jobs (the guy who likes to take bad implementations and bring them close to perfections) thinks that the model is broken, not only the implementation (Napster’s implementation, Microsoft Zune’s implementation, Rhapsody’s implementation, Yahoo Music Unlimited’s implementation, Ruckus’ implementation).
you can easily spot astroturfers. they never come back.
do they, joe?
I am not comfortable with the fact that I am under an obligation to pay someone for the privilege of continually listening to my music. I don’t care if if it’s $15 a month, $20 a month or whatever. I also hate the fact that these people could change the terms of my subscription at any time and effectively hold my music ransom. I dislike the concept that there’s no way (no legal way) to convert my subscribed music to real music, should I get tired of renting it.
I can understand a rental model as useful for sampling music, but why should I pay for it when Pandora completely owns that space? If you live in a large enough city, the radio is not a bad option.
“I am not comfortable with the fact that I am under an obligation to pay someone for the privilege of continually listening to my music.”
The “Average” iPod only holds 23 iTunes purchased songs. It seems nobody much likes buying from iTunes whether they rent or purchase outright.
Some people feel that they have to own a car instead of leasing one. Or own a house instead of renting it. Or own DVDs rather than watch movies on cable. Or own a holiday home rather than rent one. Or own a private jet instead of renting a seat on a commercial one.
But the fact is in all these situations, the best way to look at it is to add up the cost of owning over the time you want use of the item vs the cost of renting it for that time.
Sometimes owning will come out ahead, sometimes renting will.
Sometimes even in the situations where it’s cheaper to rent, some people, like the security or other intangible benefits of owning. Others prefer the savings.
Clearly not every iTunes user would find renting to be cheaper, but those for who plan to buy more then 8 songs/month for life would probably like that option.
For a 2 person household, a $14.95 subscription works out a $7.47 each/month for all the music you can listen to. That’s less than the price of one CD per person.
Using the the same payment per month to buy iTunes songs, it would would take over 100 years to fill an 80GB iPod.
However it seems clear that for most people Rent vs Buy is not the problem. At the right price, eveybody will rent instead of buy or vice versa.