“One quick last word on Macworld and what Steve Jobs didn’t do. The technology that enables movie rentals also could enable music rentals — or, in other words, a music subscription service like Rhapsody,” Saul Hansell blogs for The New York Times.
“The technology behind this is that iPods need to have a tamper-proof clock in them so that content can be vaporized after its expiration date. The first models didn’t have this feature; the new ones do,” Hansell writes.
“This came up yesterday for me when I had lunch with Ted Cohen, one of the most thoughtful people on digital music,” Hansell writes.
MacDailyNews Take: Apparently, he’s “thoughful” because Hansell wrote it in a New York Times blog.
Hansell continues, “Mr. Cohen sees the world from lots of angles, and like most people I know in the music industry, he believes that subscription services are the best answer to the industry’s problems.”
MacDailyNews Take: A continuous revenue stream vs. actually making good music that compels people to buy would certainly be the music industry’s best answer. Not so much for their customers.
Hansell continues, “Some in the music industry are not giving up on this, but they want to hide the subscription fee in something else. Universal Music is proposing what it calls the Total Music plan, which would bundle a music subscription service with a computer, Internet service, a mobile phone or something else. (This still wouldn’t do much unless Apple agreed to play along.)”
MacDailyNews Take: The operative word is “bundle.”
Hansell continues, “Mr. Cohen said, with no small frustration, that all the market problems could simply be solved if Mr. Jobs decided to “invent” music subscription services the way he invented online movie rentals.”
Full article here.
Once again, as we’ve often said, “Business models that fly in the face of human nature are doomed to failure.”
Unlike with almost every movie, 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.
Buying 1,000 excellent songs from Apple’s iTunes Store costs $990 for life, but to listen to them with a $14.95/month subscription plan for 10 years would cost $1794, for 20 years it’d be $3588, $5382 for 30 years, $7176 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).
The music subscription model, as the market has proven, is a pipe dream. But that mirage of an easy, sustained flow of money tempts them further into the desert with each passing day. 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.
Now, for movies, a rental service makes perfect sense because it better fits the way people consume movies 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.
Because of how we consume these two very different types of entertainment, we want to buy our music and rent our movies via Apple’s iTunes Store.