“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
CNET wants a subscription service so it can write articles saying Itunes has failed at selling music. M$ still pays for them.
Tech, Writers all think they know what is best for the music business and the user’s and consumers in general. They (the Tech booffens keep preaching how the customer will all be subscription users of Music by the end of the year and how the subscription model will save the music labels.
For the most part customer’s in general have too many reoccurring charges as it is and in hard economic times don’t what extra reoccurring charges. With an uncertain economic future launching or taking over any online luxury service is going to be a tough sell. If Apple decided to do a subscription service it will not be because they have high hopes for such a service it will be to get what they want from the music labels DRM Free Music sells for their full catalogs.
In the music industry (outside the music labels themselves) the insiders don’t hold much stock in the notion that music service subscriptions will ever amount to anything more then a prayer for the executives banking the futures of the labels on it. Subscription type models are troubling on the back end when it comes to revenue sharing and the labels licensing fees. With iTunes this problem is compounded by the volume of Indie music and music from small labels. The major labels lay claim to the vast majority of the revenues which may not be a correct proportion of the revenue distribution. In the end the all you can download and store and reuse model will at some point end up with the music subscription service provider and the major labels in court for collusion, price fixing and anti-competitive behaviors to name but a few of the more troubling points. (the NetFlix model subscription model removes the potential for this type of action because you get a movie(s) and then most return what you had before getting the next one. So each month the revenue sharing is accounted for in an exacting detail of what titles where rented and returned each month and there is not the nebulousness of what the user downloaded and did or did not listen to that month and as the user can keep downloading tracks and keep an unlimited number of tracks as long as they maintain an active subscription, revenue sharing becomes a nebulous accounting method filled with possible pit falls and potential legal issues yet to arise. Much of the music industry insiders believe it a short run before the subscription model dies a permanent death, at the hands of justice.
This clown seems to think it’s ok to let the music parasites tax all iPod buyers! Anything else he thinks is worthless.
@ CNET
Why do the rumors persist? Because you keep writing stupid articles about it.
Why should APPLE change what they are doing?
Why should they take a chance with subscriptions?
Quite few have and the business model is NOT successful.
Apple has a model, and it give the consumer the choice in buying exactly what they want, without being forced to pay for other misc. stuff. So again, right now, why should they?
People have voted with their dollars over and over.
I’m with MDN; I want to own my music. So I don’t really care about a music subscription. But a MOVIE and TV subscription service is a whole other thing. I’d be the first to sign up.
“Take a chance”? Sounds like Apple would be risking something if it offered a subscription service. And it also sounds like Apple would have something to gain.
There would be no risk to Apple if it decided to offer a music subscription service alongside the current 99 cents per song model. However, since Apple already has 90+ percent market share for legally downloaded music, and is now the #1 music retailer in the U.S., it would not have very much to gain from the effort.
A better place to use a subscription service would be for video. How about unlimited rental-mode (like the movie rentals) downloads for TV shows, for a fixed monthly cost. For a lot of people, that would be a good alternative to cable.
Frankly, I’m annoyed by those who proclaimed that “People have voted with their wallets”. People never had a chance to vote with their wallets!. Apple never gave them a chance to choose between subscription and buying. The only way to try a subscription was with an utterly crappy, Windows-only, unintuitive, useless garbage offered by Napster, Rhapsody, etc., which wouldn’t even work with an iPod, thereby excluding vast majority of those who even might be interested.
We just don’t know if people would go for a subscription or not. Obviously, buying makes much more logical sense than renting (and then losing it all once you stop the subscription). However, we simply cannot know how many people out there would fins renting better for them.
Monk VanDu has said something that makes complete sense and has been quite effectively ignored by all other declarative statements here. Teens’ musical tastes change with seasons. Parents of teens know this all too well. They waste gobs of money on iTunes songs they only listen to for a limited time.
It would cost very little to build an iTunes rental store for music. DRM and everything else is already in place (for movie rentals), so why not go and just totally wipe out Rhapsody? The only reason these are still in business (with as little a subscriber base as they have) is because they are not challenged by Apple in the rental business. Remember, their 700,000 subscribers bring in over $100 million per year — equivalent of 100 million songs sold. It’s money for Apple to just take away. There really is NO reason why not.
Now, if this subscription model actually sees the light of day, I’m curious how Apple is going to compensate me (along with literally thousands of other independent artists) when they rent a handful of copies of my music on iTunes. Am I going to get $0.0000001 per month of rental for each user? How is this going to be accounted?
When Universal rents hundreds of thousands of copies of a song of one artists, they can figure out the math for the royalties and it will be some reasonable dollar value. For a guy like me, it will be a rounding error and I’ll most likely get nothing for those rentals.
As an artist, I’m not exactly thrilled with an online music rental business model. As an Apple share holder, though, they need to go for it.
Why bother??? Renting music just doesn’t cut it – a radio works better than a subscription model.
wjw1,
I don’t think you understand what they mean by subscription. With radio, you don’t get to choose what you’re listening to, at what time, in which order and in which city/country/continent. The local station DJ does.
With a subscription, you pick and choose your songs, create playlists and do whatever you want, in the same way you do with the music you own (except or the burning), and you can do all that as long as you keep paying that subscription.
In fact, nothing like the radio; more like the iPod, only with the recurring revenue for the labels…
… and that’s why they won’t go away. There are tons of companies that want to sign you up for a subscription to something you’d be better off buying, and music is no different.
As long as there are companies making killings with subscription models, even in other industries, there will be people suggesting that Apple should do it too. These people either forget or don’t know that screwing the customer would harm Apple’s reputation, which would kill their sales.
@Monk VanDu and Predrag
“…replaced in days/weeks when something else comes along. … The music they do buy becomes an embarrassment to them 6 months to a year later, and is often deleted anyways …”
” …Teens’ musical tastes change with seasons”
Sounds like some kids may need a lesson in spending their money wisely not blithely.
What! you guys never saved up your money to buy some tunes, that you never had a stack of music – records, tapes or compact discs when you were kids and if you did, you threw them all away … how sad.
Why not instill in your children the notion that the music they liked last year, today and next year – will play an wonderful ongoing role in their progress to maturity.
“Music alters and intensifies their moods, furnishes much of their slang, dominates their conversations and provides the ambiance at their social gatherings. Music styles define the crowds and cliques they run in. Music personalities provide models for how they act and dress.” – Professor Donald Roberts of Stanford and Professor Peter Christenson of Lewis and Clark College.
With a lot of laughs, they will discover in the future, that the lame, sucky and embarrassing tunes of their adolescence, will in due course enable them to recapture their experiences of the now.
When we get older (these days seemingly anything from 25 yrs. up) and start to reflect on the heady days of our youth, particular songs/ tracks act as landmarks, marking important stages in our past, giving us the ability to recapture the memories of happier or not so happier times … this is one the amazing abilities and awesome capabilities that music is able to inspire in people.
All I’m saying is, encourage them to keep their music. It’s a lot of fun later on.