Analyst: Apple may be forced to offer subscription service [updated] | iLounge News

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Analyst: Apple may be forced to offer subscription service [updated]

Apple’s iTunes Music Store is facing its strongest challenger in subscription services from Napster and others. At least one analyst says that subscriptions will outpace downloads within the next five years.

“Subscriptions are a great thing for real fans because you get access to a lot of music. The appeal is it’s on-demand. As long as you keep paying, its all there,” Jupiter Research analyst David Card says.

Many believe Apple CEO Steve Jobs will change his stance on subscriptions (he says they won’t succeed because consumers want to own, not rent) if iTunes and the iPod are challenged.

“The only reason they have iTunes is to sell iPods. If it turns out subscription services are important to sell iPods, they’ll probably get into that business,” Card says.

Update: Today at the iHollywood Forum Digital Living Room conference taking place in San Mateo, California, RealNetworks CEO Rob Glaser said that one day Apple CEO Steve Jobs will have to move iTunes to subscriptions. “The day that they introduce subscriptions is the day that Steve Jobs has the brilliant revelation that subscriptions are a good thing,” Glaser said.

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Comments

1

Good to see there are still some analysts who don’t know what the real world wants. Thought those were all working at McDonalds already, Guess at least one still has a job :)

Posted by John Wilker in Southern CA on March 7, 2005 at 10:48 AM (CST)

2

I think at first the subscription services will be a hit but will slowly die off.  First off any free month promos will have ended and after a few people cancel and realize they no longer have any of that music they’ve been paying to listen to, then the word of mouth will get around that the system sucks.

Posted by Jazzlawyer in Kelowna, BC Canada on March 7, 2005 at 10:55 AM (CST)

3

I definitely wouldn’t mind if there’s a subscription service.  It’s not like they are forcing you to use the subscription service….If you like a song, you can still download it for permenant collection.  If not, you can just find other stuff to download.  Having the flexibility of using the entire iTunes Music Store collection with the ability to put everything on the iPod will be an attractive option for customers.  The only problem though would be if somehow the DRM is cracked…That would create some pretty big problems for Apple.

Posted by VertigoLimit on March 7, 2005 at 10:58 AM (CST)

4

I completely agree with VertigoLimit on that one, was actually just writing it up myself.

Having the ability to subrscribe AND purchse would be the best way to go, in my opinion.  I know there have been a couple songs that sounded good on the 30 sec. previews, but was really dissapointing after buying the whole song.

The DRM has already been cracked for Napster, but I don’t think it’s been long enough for them to tell what kind of effect it has had.

Posted by LilAlienD in Maryland on March 7, 2005 at 11:08 AM (CST)

5

I don’t think you can offer both a subscription and a per download service side by side if you’re iTunes.  Arguments aside for which is better, I think it would just confuse the consumer. 

I kind of liken it to cell phone services - each carrier has multiple plans, multiple phones etc;.  It’s definately cool if you want choice (and choice isn’t bad), but it’s not very simple either.  Which phone do I want?  Which plan do I get?  Do I get text messaging? yada yada - it makes your head spin.  I guess I don’t want iTunes to turn into a jack of all services. 

All though, if there is one company that’ll make subscriptions viable, it’s Apple.

Posted by ipod21 on March 7, 2005 at 11:15 AM (CST)

6

I’m not so sure that it would confuse folk - after all, Amazon now offer both DVD purchase and rental side by side.

Posted by Magic Rabbits in Aberdeen, Scotland on March 7, 2005 at 11:22 AM (CST)

7

I don’t think it’s gonning to happen. Why? Well who wouldn’t want to download 1 Gb or Two worths of .m4P’s? Given all the known / unknown tools to strip the Fair-Play DRM form those Files! I’d only need but Four short Weeks to literally s*ck down anything that I found worthwhile on the iTMS…

Posted by Ichijoe in Deutschland on March 7, 2005 at 11:27 AM (CST)

8

I agree with you John. I hear there’s a new opening at the Mickey D’s down the street - he’d better hurry before the Sony portable audio execs get there first. BTW LilAlienD, as long as software and rights management exist, they’ll be hackers to break the code and lawyers to sort it out (no offense Jeremy).  Thank goodness, otherwise we’d have nothing to talk about.

Posted by runningman on March 7, 2005 at 12:01 PM (CST)

9

Whether or not the DRM is cracked probably doesn’t amount to a hill of beans in the market. We’ve already got billions of files available at any given moment from P2P networks and the music industry is still doing reasonably well in spite of the RIAAs protestations. The person who signs up for a short while and steals a bunch of music doesn’t actually cost them more or less than a non-stealing customer for that same period. Most people wouldn’t know where to begin with trying to crack DRM, and those people are going to keep ponying up the $10/month or whatever the fee is.

Posted by Code Monkey in Midstate New York on March 7, 2005 at 12:42 PM (CST)

10

A few points:

The MORE options, the BETTER for the music consumer. What possible argument can the music lover/consumer have against a subscription model. I laugh at most of the “con” arguments for an iTMS subscription model. They’re usually argued from a what’s good for Apple point-of-view. That’s crazy! What is best for the consumer is variety, flexibility and, above all else, selection. How can anyone argue against that! I want both models. And, I want WMA/AAC/OGG/Flac/etc. capability on my iPod too. If I had a non-iPod, I would want AAC capability. It is not up to the consumer to make these models work. Apple, MS, Creative, iRiver, etc., need to figure it all out.

Why would any iPod user not want both an a la carte and subscription model available? Could this not expand the potential iPod customer base? The answer to that question is, obviously, Yes!

Remember, you could actually choose to use whichever service that you prefer. Subscription would allow users to truly sample music, at a nominal cost,  before buying. Lessens the risk of buying krap (30 second samples are not enough!).

Subscription service is very similar to satellite radio. Except that YOU choose what you want to hear. Satellite radio subscribers do not get to keep the music, do they? This might especially be attractive to the music lover who does not purchase that much music. They’re less likely to “need” to own their music.

All in all, I’m rooting for an iTMS subscription model. Until it happens, if it happens, I will continue to subscribe to Napster, convert the protected WMA files to MP3 and transfer them to my iPod. Yes, there is a non-Winamp (which is no longer an option anyway) method that converts the files. And it’s much faster than real time!

Posted by zumpp99 in Western NY on March 7, 2005 at 12:59 PM (CST)

11

Outpace downloads in 5 years? No way.

Become a big enough sub-market to be worth the effort of being involved with? Quite possibly!

In which case Apple can do so.

Posted by Nagromme on March 7, 2005 at 1:15 PM (CST)

12

Outpace downloads in 5 years? No way.

If you count the total dollar volume of music subscription services, then they have already outpaced per-item licenced downloads.

If you count the total number of tracks playedm they long ago eclipsed individual downloads.

This argument comes around and around, and it’s like Holocaust Denial, there are always some people who will refuse to see what’s right in front of them.

Within a year or so all the major telcos will be offering 3/4G services with built-in music subscription services. Just likie unlimited data, if unlimited music is available for an extra $10 on a monthly cell bill, how many people would think that was a good deal? Especially if the playlists were easily transportable to PC/Mac, and home stereo? You then have 360 music coverage from a single subscription. This is where the market is heading.

Posted by Demosthenes on March 7, 2005 at 1:30 PM (CST)

13

Godwin’d!

Posted by Buttercup on March 7, 2005 at 1:38 PM (CST)

14

Demo - no offense, but using the Holocaust in your post is, well, offensive.  Somehow trying to relate a posting about music downloading to the deaths of millions is in poor taste.  I’m sure that not what you meant, but don’t even go there.

Posted by ipod21 on March 7, 2005 at 1:45 PM (CST)

15

$240 a year to be able to have, on my iPod, pretty much whatever I want to have as my interest changes from day to day, month to month, vs the same $240 buying me a couple dozen releases on iTunes that I get to “own” forever (long after we’ve stopped listening to the music). Hmm.

Posted by leertracy in Los Angeles on March 7, 2005 at 1:48 PM (CST)

16

“$240 a year to be able to have, on my iPod, pretty much whatever I want to have as my interest changes from day to day, month to month, vs the same $240 buying me a couple dozen releases on iTunes that I get to “own” forever (long after we’ve stopped listening to the music). Hmm.”

Do you really “stop listening to the music”?  Maybe if we’re talking modern artists!

I’m still listening to stuff from my childhood back in the ‘60s and ‘70s.

Posted by Quoth_the_Raven in Herndon, VA on March 7, 2005 at 1:53 PM (CST)

17

Leetracy & Raven-

Isn’t the going rate $180 a year with Napster?

Posted by Talking Madness in Los Angeles on March 7, 2005 at 2:31 PM (CST)

18

Who here buys more than $15 a month worth of music off iTMS?  I’m just trying to get a feel of what the volume per person is.

I’ve had an iPod for years an since being able to use iTMS I’ve only purchased seven (7) songs.  The first one was just to see how well it worked, the second was a free Pepsi song & the last five were the five free songs for using PayPal.

ITMS just doesn’t fly with me.

Posted by Talking Madness in Los Angeles on March 7, 2005 at 2:36 PM (CST)

19

It is interesting the subscription service. I detest having to download from itunes and convert the files to mp3 so I can do what I want. However I do want to own my music I download. I also wish the Ipod would play other music files

Posted by Goodlovin in chicago on March 7, 2005 at 2:51 PM (CST)

20

What happens if/when one of these DRM-equipped music subscription services go out of business—do subscribers continue to pay someone, whoever, to have access to their (perhaps) vast libraries of tunes?  Or do those libraries become simply unavailable—like forever?

Posted by Pragmatist on March 7, 2005 at 3:00 PM (CST)

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