updated 03:05 am EDT, Mon September 3, 2007
In an interview with the New York Times, head of Columbia Records and legendary producer Rick Rubin predicts a music industry future where the subscription model dominates, and Apple's per-track purchase model, along with the iPod, are things of the past. "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. You'll say, 'Today I want to listen to ... Simon and Garfunkel,' and there they are. The service can have demos, bootlegs, concerts, whatever context the artist wants to put out. And once that model is put into place, the industry will grow 10 times the size it is now."
The pursuit of a new business model is spurred by the fact that traditional record companies have seen radio audiences flock to satellite, losing their grip on the medium, record shops like Tower records shutter their doors, and the album market be adversely impacted by Apple's download singles.
Recording titan David Geffen also sees the subscription model as a saving grace for the traditional record industry. "Steve Jobs understood Napster better than the record business did," he told the Times. "iPods made it easy for people to share music, and Apple took a big percentage of the business that once belonged to the record companies. The subscription model is the only way to save the music business. If music is easily available at a price of five or six dollars a month, then nobody will steal it."
Also at issue is the non-variable pricing nature of the iTunes store -- a model Apple has stuck with, perhaps even to the point of losing major content providers like NBC, which was recently banished from the iTunes Store after stating that it would not renew its contract with Apple in December. A subscription model would also make variable pricing impossible, which some insiders think could reduce overall revenue.