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iTunes rivals push subscription model

updated 07:20 am EST, Mon January 3, 2005

Subscription music model

Many of Apple's digital music rivals are rather than the pay-per-song model offered by the iTunes Music Store: "Chris Gorog is convinced that people won't continue to pay $1 a song for online music.That is despite Apple's string of recent achievements, including 200 million songs sold at its iTunes Music Store, and nearly 4 million iPod digital music players moved into consumers' homes in 2004. Gorog runs Apple rival Napster, which offers digital downloads and a music subscription deal. Consumers get unlimited access to listen to 700,000 songs for $9.95 monthly. The hitch is that to move songs onto a portable digital device or to a CD costs extra: $1 a song. That's one of the reasons digital music fans have not taken to the subscription model � also offered by Real Networks' Rhapsody � in a big way. But Gorog thinks that will change next year. And he has other heavyweights such as Yahoo and Microsoft in his corner."

by MacNN Staff

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phillymjs
Fresh-Faced Recruit

Joined: Jun 2000

0

01/03, 08:30am | report spam | close Reply |
Chris Gorog is an idiot

People like the idea of ownership, period. These guys are nuts if they think the majority of people will want to pay a monthly subscription and have all their purchased music evaporate when they cancel that subscription.

These services pushing subscriptions complain about Apple's lock-in with the iPod and iTMS, when they're trying to lock customers in as well, just in a different way.

vickys-box
Fresh-Faced Recruit

Joined: Apr 2004

0

01/03, 08:35am | report spam | close Reply |
Here we go again

Gorog thinks subscriptions work because they're the only way to make money. What Gorog, and pretty much everyone else doesn't realise is that the iTMS is essentially a PR tool for Apple. Apple doesn't care if they make virtually nothing out of the iTMS. It's more important to keep the Apple brand, ease-of-use etc. in the public arena.

Will C
Mac Enthusiast

Joined: Jan 2001

0

01/03, 08:40am | report spam | close Reply |
Gorog

Well he would say that would'nt he

horvatic
Fresh-Faced Recruit

Joined: Apr 2002

0

01/03, 08:58am | report spam | close Reply |
I DON"T WANT TO RENT!

Like I have said many times I DON"T WANT TO RENT MY MUSIC! Why should I pay for streaming music when it's FREE! Steve Jobs said it before and I totally agree with him that I want to own my music so I can do what I want with it. The only way a subscription model would work is if the monthly charge included unlimited downloads. You know that will never happen. iTunes model has the competition beat!

mjtomlin
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Joined: Oct 1999

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01/03, 09:01am | report spam | close Reply |
Said it before...

Hello!? Are these people stupid? The subscription model has already failed. Before iTunes, just about all of them were subscription based services and they all did miserably (also, none of them worked with Macs and probably still won't).

All these people are hoping that they can spread their propaganda and some consumers will take the bait now that Apple has made legal music downloading as popular as it is.

One other thing to note... What a pain in the a** it would be to have to look through a million songs for one that you feel like listening to at any particular moment! I have 3000+ songs in my iTunes library and it already takes a while to build playlists. I couldn't imagine how much time I would spend looking through 700,000 songs!?!?

Also, if you're going to pay a monthly fee, why not just get satellite radio... at least you can listening to it wherever you wanted and you're not tied to your PC.

kloda
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Joined: Oct 1999

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01/03, 09:19am | report spam | close Reply |
online...buffer...music

Hmmm...Apple's model has been pretty darn successful and subscription based services haven't. Yeah, that's a strong indicator of it going to work in 2005.

If I'm going to rent, it will be XM Radio (which I already do for my car). I like iTMS because I buy the song. Since I got XM Radio, I've been buying a lot more songs via iTMS. But XM Radio subscription is different from Real Music or Microsoft's service.

I just love some of these "analysts."

Okonomiyaki
Fresh-Faced Recruit

Joined: Apr 2003

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01/03, 10:10am | report spam | close Reply |
2005

Just wait! Everything will be different in 2005. Whatever didn't work in 2004 or earlier will magically be super successful in 2005 because, get this, it's a whole new year!

Kees
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Joined: Sep 2001

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01/03, 10:28am | report spam | close Reply |
so...

basically, I get to pay $10,- a month to preview music, and whenever there's something I like, I get to pay another buck/song?
I'll stick with iTunes, thx very much.

evansls
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Joined: Oct 2004

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01/03, 10:29am | report spam | close Reply |
i rip the music

i pay the 10 bucks a month with rhapsody and then rip the high quality stream if i find something i like. it's what i used to do with my stereo back in the day, but the difference is my radio plays what i want when i want! if apple had it's own subscription, i would dump rhapsody in a heartbeat - but that doesn't mean apple would lose business per se, because what i'm doing is considered a power user feature - something that you must go out of your way to teach yourself and follow through. i also use apple itunes to buy music i can't find anything where else.

benhur
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Joined: Jan 2001

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01/03, 10:32am | report spam | close Reply |
Kinda wish Apple would

have a subscription model. Subscription models did not work but Apple's take on it would obviously be much better. I honestly don't care whether I own it or not. i just want to listen to music. It's the same with the FM tuner that's lacking on the iPod. There are some good independent/underground radio stations out there and I enjoy listening to them, don't care if I "own" the song or not.

The competition will try to differentiate themselves from Apple, sure, but some of the ideas arent' bad. Why not have the best of all worlds, download to own, subscription, and an FM tuner. Somebody's gonna do it, it might as well be Apple.

mbryda
Senior User

Joined: Mar 2002

0

01/03, 10:35am | report spam | close Reply |
Why?

Why on earth would I pay $9.99 to listen to music on my computer? Yeah, I may get access to 1 million songs on Napster, but to xfer to listen away from the comptuer it's $1 song and they expire if I cancel my subscription? What moron would sign up for that?

Hello? Get XM for $9.99, have it in your car/home/wherever. Add the streaming for $3/mo and you get the same thing (and it works with Macs).

Subscription services for music are stupid.

VadersCape
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Joined: Mar 2004

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01/03, 11:30am | report spam | close Reply |
Gorog = Balrog

Identical howling. Identical fate.

Chris Gowrong has to back something that's the opposite of Apple in order to get those other "players" in his corner. But unlike the point-and-click genius of iTunes, Gowrong's pitching point-and-laugh idiocy. But him and his "players" need some rat hole to throw their money down, so be my guest and go out of business. Then when they get back on their feet and get themselves set up in that studio apartment in the cheap rent district with their no-name PCs, they'll be glad they can click on over to the iTunes Music Store where they can purchase 99-cent tracks to cheer them up.

ender
Junior Member

Joined: Mar 1999

0

01/03, 11:38am | report spam | close Reply |
iPod Killer

Until the often predicted, never realized, "iPod-killer" comes along that supports it, subscription services will always be a distant 2nd place. On the train to work this morning, 4 of the 5 people listening to music were iPod users (distinctive white earbuds were a marketing stroke of genius!). And the 5th guy might have just been listening to an iPod with different headphones.

Yahoo's (MusicMatch) Goldeberg said it at the end of the article, "subscriptions are a much better business for us." For THEM. Could it be because none of their purchased music will play on an iPod and so is next to useless? Basically, subscription services make more sense for Apple's competitors because they are unable to compete with Apple for the purchased music market. There is no evidence to support Gorog's belief that the overall market will shift towards subscription services.

car1son
Mac Enthusiast

Joined: Nov 2001

0

01/03, 11:45am | report spam | close Reply |
not own,just longer lease

In the larger sense, the current iTunes is a subscription: the songs contain DRM to which Apple holds the key; so you don't really "own" the songs. Technically, Apple can change the terms of use with a software update. (Apple has already done this twice: once you actually make the terms of use more lenient by increasing the number of authorized machines - which naturally provoked no protest - and once more recently to lock out songs converted with Real Network's Harmony service.)

boomer0127
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Joined: Jan 2004

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01/03, 12:15pm | report spam | close Reply |
burn backups!

Carlson, I agree about the DRM change potential. That's why I burn backup audio CD's of all of my purchased music. If the DRM changes, I still have my songs (and unless Apple can get into my Eudora Saved mail, I still have my reciepts). Apple also changed iTunes so you couldn't burn the same playlist more than 7 times. But then there's Toast for that.

MacScientist
Junior Member

Joined: Feb 2000

0

01/03, 01:16pm | report spam | close Reply |
Re: just a longer lease

car1son and boomer0127, you are just plain wrong. If Apple were to change the terms of your license agreement, your presesnt music purchases would be safe. Only subsequent purchases would be affected. If Apple were to suddenly go out of business, your present music purchases would be safe. You would simply be unable to make additional purchases. In the case of subscriptions, however, you have your music only so long as the subscription is active.

testudo
Fresh-Faced Recruit

Joined: Aug 2001

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01/03, 01:35pm | report spam | close Reply |
Re: just a longer lease

car1son and boomer0127, you are just plain wrong. If Apple were to change the terms of your license agreement, your presesnt music purchases would be safe. Only subsequent purchases would be affected. If Apple were to suddenly go out of business, your present music purchases would be safe. You would simply be unable to make additional purchases. In the case of subscriptions, however, you have your music only so long as the subscription is active.

Wrong! The last change affected ALL music, not just ones bought after the change (I can play all my bought music on 5 computers, not just the new stuff on 5, the old on three).

And if Apple were to go out of business, you better hope your computer is 'licensed' to play the music while you spend your time to burn CDs. Because if not, your computer won't be authorized, and all your purchases are just taking up disk space, unplayable.

However, I don't consider the change that screwed up Harmony a change in license, that's a change in the way the software worked.

testudo
Fresh-Faced Recruit

Joined: Aug 2001

0

01/03, 01:40pm | report spam | close Reply |
Subscription model

A subscription model makes lots of sense to those people who don't have a portable music player. Some people actually use their computer to listen/play their music (run it through a receiver and good set of speakers, it don't sound that bad - unless you're listening to c***, that is). So for these folks, a subscription would work because they'd have access to all that music for only 10 bucks.

Now, for those who want to break away from the computer and listen on CD/MP3 plater, then it doesn't make sense, esp. at the same cost per song (if they had subscription plus only 50 cent songs, then you might have something). I rarely listen to my MP3 collection from my computer, so subscription makes no sense (although, if they had it, maybe I'd listen more?). Plus, I'm not one who searches around for music to like, so it doesn't help there much either (which is why the p2p logic of 'getting people a chance to try music they wouldn't normally hear' concept never made sense to me, because I only search for stuff I know, and wouldn't know how to find stuff I don't know about), so I more listen to internet radio if I'm at the computer wanting to listen to something on it.

But there is a segment who uses iTunes alone to manage/listen to their music, and with them, subscriptions could save a boatload of money.

robtronik
Fresh-Faced Recruit

Joined: Dec 2002

0

01/03, 03:23pm | report spam | close Reply |
Three Words.

Napster To Go.

What you all fail to realize is that Napster has three offerings given the consumer choice:

1 - The store. Yep, you can buy your tracks just like Apple's iTunes.
2 - The PC based subscription. You can stream your tracks and download them to a computer to listen to them any time you want. Just like Rhapsody, but better because you don't need to be online to listen to your downloaded tracks.
3 - Napster To Go - Move your tracks for one fee per month to your portable device.

The last is going to be a killer offering. But more importantly, you can do things with the napster service that you cannot do with any of the other services....and the fact that many device makers are also designing players giving the consumer yet more options....well, at the very least, Napster will be #2 in the space. Apple is very good at marketing and aggressive placement.

But it cannot contend with the real value proposition of choice. Think of it this way:

You listen to your favorite radio station, you download their playlist of the songs you like. You don't really want to buy them, but you kinda like them...so you sign up to Napster To Go and now you can move those songs to your PC, to your portable device (that supports NTG), whatever. And if you end up liking some of the songs, then you can buy them. Burn them to CD, etc.

Don't discount the subscription model. There are a LOT of benefits to it besides just paying for tracks (which Napster also offers).

ender
Junior Member

Joined: Mar 1999

0

01/03, 08:33pm | report spam | close Reply |
Subscriptions -> Leasing

Just like auto leasing, subscription music services will be right for some people, but probably not for the majority. The typical leaser is someone who either: A) was looking for the lowest monthly payment, or B) wanted to be able to change cars often. But leasing is seldom the best long-term financial option.

The problem with subscription services is that to reap the benefits, you need to be someone who likes to mess with their music often (ie, building and maintaining playlists, uploading music to your player, etc). One of the reasons I seldom listened to CDs was the hassle of keeping track of them, swapping disks in my CD player, etc.) So if you are not interested in having to actively manage your music collection, and you essentially keep mostly the same music on your player, then a subscription service means you are paying a monthly fee to listen to the same music, and you are better off just buying the music.

Given that a whole sub-industry has sprung up to help people get their music on their iPod, I think most people just want to listen to their music, not have to management on a monthly basis to justify a subscription fee.

slider
Mac Elite

Joined: Oct 1999

0

01/03, 10:41pm | report spam | close Reply |
Oh sure

So now all of a sudden Napster and Yahoo are the experts in downloadable music. If this was so freaking obvious then why didn't they do it before Apple took all of this and turned it into something that, one, works, two, is profitable, three, something labels gave the nod to. Here's the thing, MP3 players and downloadable music has been around long before Apple started working with it, and what did all these ambulance chasers do with it? Nothing, that's what. The only thing companies like realplayer, napster and the rest are doing is trying to pull in cash and will say and do anything to do it, if this doesn't work lets call them the devil and see if that works, it not that then how 'bout this. They have no business model, they're all taking shots in the dark hoping to hit something. Lame.

VadersCape
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Joined: Mar 2004

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01/03, 11:01pm | report spam | close Reply |
Shots In The Dark?

These guys couldn't hit themselves in the a** with a bass fiddle.

LouZer
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Joined: Nov 2000

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01/04, 12:24am | report spam | close Reply |
Quote

"We sell hundreds of downloads," Goldberg says. "But we don't make money on them. Subscriptions is a much better business for us."

Well, hundreds of downloads? That sounds impressive, doesn't it.

And I'm kinda confused on how the RIAA makes their money (because you know they want their money) on a subscription model. Also, the reason they all LOVE the subscription model is they all hope that the users will stop downloading after an initial spark, thus they get their fee without actually having to share much of it.

evansls
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Joined: Oct 2004

0

01/04, 05:47am | report spam | close Reply |
iTMS Background Check

I have to give it to Musicmatch, Rhapsody and Napster -
they do have good reason to complain about why the 99-cent pricing
formula is not turning a profit for them. But at the same time I find
it sad they can't realize what the problem is with their service even
after all the preaching to the quire! "We sell hundreds of downloads,"
says Dave Goldberg, Yahoo's music division. Well Goldberg there's your
problem! You sell only HUNDREDS of downloads while Apple sells
practically a million songs a day, nearly 15-20 million a month and
200 million a year! But it's Napster CEO, Chris Gorog's comment that I
love the most. "With our plan, customers can get 10,000 songs on their
device for $180 a year." Does he forget that it took Napster a year
since its initial launch to allow its favored "subscription model" the
device portability that Apple has allowed its customers the freedom to
do with their iPod(s) since day one? Sure - Napster's always been able
to transfer its 99-cent "downloads" to their Samsung Napster portable
player, but as it's been stated time after time, single downloads
isn't Napster's major bread winner! So, it's practically a given that
music lovers wouldn't want to use Napster, Musicmatch and Rhapsody,
because they want to take their music with them, which is what Apple
has stated all along! h*** - Napster's CEO finally recognizes this,
which is why he's advertising their $180 a year Napster-To-Go feature
for the subscription model that's only been available for 3 months
now! Can you believe it? Three months! Talk about being late out of
the gate, huh? Apple sold 2 million iPods during their fiscal fourth
quarter and Napster thinks they can influence the market at this late
of the game with Napster-To-Go and their outdated portable player when
the entire world now owns an iPod? It wasn't until Microsoft launched
its Janus technology in November 2004 that allowed Napster the luxury
to transfer its bread winning subscription model to portable players
such as Rio, Creative and their own Napster branded player! In short
my thoughts behind this ridiculousness is: "Well, I'm sorry, but you
missed the boat a year ago!" But really they should not have been
relaying on a third-party company like Microsoft who is an advocate
for falling behind. Napster should have thought of an original
business model for themselves rather than ride the coat-tails of what
Apple (re)invented nearly 2 years ago! Plus, I wouldn't be surprised
if the reason behind Napster's $5 monthly fee increase for portability
transfer is in reflection to Microsoft's licensing cost. Besides the
fact that it would be practically impossible to manage enough time to
actually download 10

evansls
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Joined: Oct 2004

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01/04, 05:48am | report spam | close Reply |
continued

,000 songs to your iPod, why is it such a big deal to point it out anyways? If a subscription model is such a huge success for Napster and Musicmatch then why would Rhapsody go so far to hack Apple's advanced audio coding (AAC) so its customers can use their 99-cent "downloads" on the iPod? Wouldn't Rhapsody subscribers now be downloading 10,000 songs to their player of choice now? Seems a little hypocritical to me, don't you think?! If Musicmatch, Rhapsody and Napster continue to fuel the media that their "subscription-based models are the future" then no one will care if Apple doesn't license AAC. I think Apple shouldn't care based on the fact that their competition's subscription model is so successful! I also think Musicmatch, Rhapsody and Napster would probably benefit greatly by not choosing Apple's AAC technology, because it will probably be just one more licensing cost their customers would have to pay for at the end of the day to rent their favorite music.

Overall Total: Apple Press Releases
- March 15, 2004 - 50 million
- April 28, 2004 - 70 million
- July 12, 2004 - 100 million
- October 14, 2004 - 150 million
- December 16, 2004 - 200 million

Actual Monthly Sales: (http://www.appleinsider.com/article.php?id=719)
May - 10,830,573
June - 12,331,133
July - 15,103,099
August - 15,665,890
September - 16,229,956
October - 17,776,830 (projected)

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iTunes rivals push subscription model

updated 07:20 am EST, Mon January 3, 2005

Subscription music model

Chris Gorog is an idiot

Here we go again

Gorog

I DON"T WANT TO RENT!

Said it before...

online...buffer...music

2005

so...

i rip the music

Kinda wish Apple would

Why?

Gorog = Balrog

iPod Killer

not own,just longer lease

burn backups!

Re: just a longer lease

Re: just a longer lease

Subscription model

Three Words.

Subscriptions -> Leasing

Oh sure

Shots In The Dark?

Quote

iTMS Background Check

continued

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iTunes rivals push subscription model

updated 07:20 am EST, Mon January 3, 2005

Subscription music model

Related Articles

Recent Articles

Chris Gorog is an idiot

Here we go again

Gorog

I DON"T WANT TO RENT!

Said it before...

online...buffer...music

2005

so...

i rip the music

Kinda wish Apple would

Why?

Gorog = Balrog

iPod Killer

not own,just longer lease

burn backups!

Re: just a longer lease

Re: just a longer lease

Subscription model

Three Words.

Subscriptions -> Leasing

Oh sure

Shots In The Dark?

Quote

iTMS Background Check

continued

Login Here

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