“The all-you-can-eat music services are the ones getting chewed up. So why do rumours persist that Apple is interested in getting into music subscriptions? In March, the Financial Times reported that Apple had talked with the top record labels about the possibility of launching a service that would give iTunes users access to its entire library in exchange for paying a premium for iPods or iPhones,” Greg Sandoval writes for CNET.
“My music industry sources confirmed that Apple has discussed a subscription service with the music industry but said that Apple has yet to sign any licensing deals,” Sandoval writes. “Still, the question is what motivated Apple to consider subscriptions.”
Subscription services “are designed to generate a recurring income for the music industry,” Sandoval writes. “This is just one of the many digital business models the labels are testing. What the mobile phone companies must do now is prove they can overcome the obstacles that tripped up other services. One of the biggest challenges, if not the biggest, is consumers apparently don’t like the idea of their music disappearing if they stop paying fees.”
“Any new music service, whether selling downloads or subscriptions, must compete against iTunes, the No. 1 music retailer in the land, which just happens to be tethered to the best-selling digital music player, the iPod,” Sandoval writes.
MacDailyNews Note: iPods do not require iTunes Store to operate. iTunes Store content does not require iPods to play. iTunes Store is “tethered” to iPod only in a marketing sense.
Sandoval continues, “While some download stores, such as Amazon.com and BigPond, have begun selling songs in the MP3 format — which means they will play on the iPod — subscription services still wrap music in digital rights management software. That means those songs won’t play on the iPod… Who knows, Apple could come in and prove the experts wrong, but at this point a better strategy appears to be to let others keep taking their whacks.”
Full article here.
[Attribution: MacSurfer. Thanks to MacDailyNews Reader “Brawndo Drinker” for the heads up.]
Apple would not be “taking a chance” if they offered a music subscription service. They’d likely make it at least a modest success. That said, we prefer to own, not rent, our music, thank you very much.
This is an example of a place where Apple is falling behind. If they don’t adopt a subscription model, we’re going to see the Macification of the iTunes Music Store this year. – Paul Thurrott, May 13, 2004