Columbia Records’ Rick Rubin dreams of unending music subscription fees and rendering iPod obsolete

Rick Rubin, co-head of Columbia Records, appears to be nearly as clueless as the rest of those making up the old guard music cartels. Rubin thinks that subscriptions are the future. Just like most other clueless music label dinosaurs. At least Rubin understands that the music industry is dead, even if he doesn’t understand what will save it.

“Seemingly overnight, the entire industry is collapsing. Sales figures on top-selling CDs are about 30 percent lower than they were a year ago, and the usual remedies aren’t available. Since radio is no longer a place to push a single, record companies have turned to television and movies,” Lynn Hirschberg reports for The New York Times.

“‘Until very recently,’ Rubin told me over lunch at Hugo’s, a health-conscious restaurant in Hollywood, ‘there were a handful of channels in the music business that the gatekeepers controlled. They were radio, Tower Records, MTV, certain mainstream press like Rolling Stone. That’s how people found out about new things. Every record company in the industry was built to work that model. There was a time when if you had something that wasn’t so good, through muscle and lack of other choices, you could push that not very good product through those channels. And that’s how the music business functioned for 50 years. Well, the world has changed. And the industry has not,'” Hirschberg reports.

“Columbia is stuck in the dark ages. I have great confidence that we will have the best record company in the industry, but the reality is, in today’s world, we might have the best dinosaur. Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it’s going to be a declining business. This model is done,” Hirschberg reports.

“Rubin… says that the future of the industry is a subscription model, much like paid cable on a television set. “You would subscribe to music,” Rubin explained, as he settled on the velvet couch in his library. ‘You’d pay, say, $19.95 a month, and the music will come anywhere you’d like. In this new world, there will be a virtual library that will be accessible from your car, from your cellphone, from your computer, from your television. Anywhere. The iPod will be obsolete, but there would be a Walkman-like device you could plug into speakers at home… And once that model is put into place, the industry will grow 10 times the size it is now,'” Hirschberg reports.

“Rubin sees no other solution. ‘Either all the record companies will get together or the industry will fall apart and someone like Microsoft will come in and buy one of the companies at wholesale and do what needs to be done,’ he said,” Hirschberg reports.

Full endless article here.

As we explain fairly regularly, whenever clueless music industry types flounder about in the mainstream press: 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 $19.95/month subscription plan for 10 years would cost $2394, for 20 years it’d be $4788, $7182 for 30 years, $9576 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 (those that can’t do basic math or who’ve been diagnosed with a terminal illness), 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. Just because subscriptions are what would preserve the old guard music cartels doesn’t mean subscriptions are the answer. Dinosaurs are extinct for a reason.

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, constantly-flowing rivers of cash do not a successful business model make, but it’s no wonder that the music cartels dream of this model. It’s just so powerful that they can’t let it go and wake up. The subscription model is the rope that will hang these greedy bastards once and for all.

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 human nature, matching the way people over the age of four 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 the 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.

Rubin should stick to producing music, stop greedily dreaming of jukeboxes in the sky that continually rain down money into music cartel pockets, and figure out that it ain’t Microsoft that’s going to own the music business.

84 Comments

  1. Sounds good to me! We can just fire up the trusty ‘ol AUDIO HIJACK PRO, hijack the stream while it’s playing, record away for a month, and unsubscribe. If they want to play dirty, everyone else will too.

    As it is, I prefer to buy and own and be legit. If Rubin doesn’t learn more about technology and human nature, he’ll sink the industry even faster.

    Word: appeared

  2. His ‘model’ sounds like a $20.00 monthly subscription to radio, except that the consumer gets to determine what the play list is for as long as they continue to pay for that right.

    It sounds like a lame attempt to extend the old model mixed with a lot of wishful thinking and dreaming of the good old days.

  3. The MDN take is right on!

    How many subscription music services have FAILED so far?

    I think these industryt characters get together with the bean counters and cook up these fantasty never-ending revenue streams in their heads and think that they can sell them to the unwitting public. Much in the same way they invent musical “artists”, based on looks and fashion, then sell them to the unwitting public.

    That may work for some things… not everything.

    My musical tastes change over time. Sometimes, I’ll “rediscover” music that I’d “forgotten” about… and hey, there it is right in my music library. Now, If I were renting my music that wouldn’t happen.

    It all boils down to taste, I suppose, but I don’t want to rent, I want to own my music.

  4. I understand how the record labels get paid with the subscription model. What I don’t understand is how do artists get paid? Does record label decide how pay them or is it based on number of people who has accessed their music. If one subscriber listens to 100 songs per month while other subscriber listens to 1000 songs per month, how does that affects the payment to the artists? The subscription model sounds great for the record labels, but a rousy deal for the artists.

  5. Well, sometimes MDN can really suck up to Apple.

    But this time they have got it spot on.

    You can listen to an album dozens of time…Whilst you’re working on the computer, driving to work, painting the house, having a shower.

    Yet, take a TV show or a movie, you’ll watch it once….maybe (at a stretch) twice.

    So it makes sense that these two media should have different business models.

    From what I can see, the reason that the music industry is so pissed off with iTunes, is that Apple seem to be championing the consumer, and giving us a fair system.

    The music industry is not about fair, or the art. It’s all about making money.

  6. He is upset that the music industry no longer CONTROLS HUMAN BEHAVIOR. Bummer. But, as we are given alternatives and become more educated, we make better decisions. Hence we reject the old and embrace the new. An educated consumer is the Music Industry’s worst enemy – and this guy has verified this. His gross sales are down, as are his margins, and he’s angry. All industry’s go through this eventual decline as new models replace old ones. Poor guy is going to trash until he goes bankrupt. Embrace the new models and work marketing magic within it. Hit the BLOGs and MySpace and FaceBooks and Wiki’s and … and maybe he’ll have a fighting chance. He’s right, they have a dinosaur. He’s wrong in thinking the music industry will define the new model.

  7. With this subscription model, what encourages Major Labels to keep producing new music? The subscriptions are providing revenue, new music may not. We will all be stuck listening to yet another remix of a Beatles or Zeppelin song.

  8. The iPod will be obsolete, but there would be a Walkman-like device you could plug into speakers at home…

    Hmmm, like a iPod?

    Because I’m not tossing one for another.

    The reason why the music industry feels subscriptions are the way is because Apple has tied a iPod to a computer. This is a expensive and tiresome chore for most people.

    It also limits the iPod to “computer” people, which just about EVERYBODY likes music.

    So Apple severs the ties between computers and iPods witha WiFi/iTMS on the iPod itself, the rest of the computer hating, computer ignorant users of the world are happy.

    Apple sells tons of iPods.

  9. Here is the quote:

    “Only 10 years ago, companies wanted to make records. But panic has set in, and it’s no longer about making music, it’s all about how to sell music”.

    In other words, the musicians are making the music, but the companies are trying to save their skins…

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