News

Apple CEO Not Interested In Music Subscriptions

Thursday, April 26th, 2007 at 10:45 AM - by

Apple CEO Steve Jobs isn't interested in adding a music subscription service to the iTunes Store, and will likely fight the record labels as they try to pressure Apple into adopting a model he sees as unpopular. Apple will begin negotiating contract renewals with the record labels next month, according to Reuters.

Mr. Jobs commented "Never say never, but customers don't seem to be interested in it. The subscription model has failed so far." Instead, customers seem more interested in owning the music they download.

Record labels, however, would love to see the top music download service abandon the pay-per-song model in favor of a subscription-based service. The music industry prefers the subscription model idea because consumers pay for the same songs over and over again, potentially generating additional revenue.

In addition to fighting the labels over subscription music, Apple will also likely be pushing for copy protection-free deals. The company has already inked a deal with EMI, and is looking to get additional labels on board.

"There are a lot of people in the other music companies who are very intrigued by [DRM-free song deals]. They're thinking very hard about it right now," he said.

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vasic said:

member since 09 Aug 2005 with 216 posts, unranked, send him a message or view his profile

Thu Apr 26, 2007 11:54 am

It has been discussed and beaten to death on these forums, but few of the participants here believed there was even the slightest of chances that we'd see DRM-free downloads on iTunes anytime soon, if ever.

If SJ manages to strongarm at least one more label (in addition to EMI), especially if that label is Universal, this would symbolize the collapse of record labels' power under the might of Apple's iTS juggernaut. Furthermore, Apple could continue do dominate unchallenged in the downloads market without any anti-trust fears, as DRM-free AACs would mean complete interoperability - AAC (officially, MPEG-4) is a standard which anyone can incorporate into their hardware and software. Sony-Ericsson already supports it, as do several other hardware makers.

Apple's revenues (and profits) from the iTS continue to grow. Their domination in the downloads market is still unchallenged. With every week of increased dominance, Apple's might over labels gets greater. It is hard to imagine how this could be reversed. And, as long as it continues, this is good for the consumers.

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dhp said:

member since 22 May 2003 with 176 posts, unranked, send him a message or view his profile

Thu Apr 26, 2007 1:17 pm

"And, as long as it continues, this is good for the consumers."

Uh, no. Complete dominance of the music download market (or any market) by a single corporation is not a good thing. I don't care who the company is. (Mind you, I'd rather it be Apple than MS or Wal-Mart.)

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vasic said:

member since 09 Aug 2005 with 216 posts, unranked, send him a message or view his profile

Thu Apr 26, 2007 2:42 pm

Well, dhp, I agree with you on the principle of monopoly (and lack of competition) cannot be good for consumers. However, as long as Jobs is leading Apple, I believe iTS domination is (for now) good for us. The other option being, the labels controlling the download business, and we know where that went before Apple took over.

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A guest said: (hide)

Thu Apr 26, 2007 2:55 pm

C'mon Steve! This is the reason I still don't use iTunes. It's such a waste of money to purchase iTunes music, but if I could pay a small monthly fee like 10 bucks, and have access to the entire catalog on my computer and my portable device (which is no longer an iPod), then I would use iTunes.

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Engine Joe said:

member since 29 Jun 2004 with 412 posts, unranked, send him a message or view his profile

Thu Apr 26, 2007 3:31 pm

Guest, I think SJ doesn't really care that you want a subscription model since you don't use an iPod. Not speaking about the TV/movie/video front, but strictly music, he'd rather you buy an iPod and never use the iTunes store than have you as a $10/mo subscriber and never buy an iPod.

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Tiger said:

member since 17 Jun 2003 with 909 posts, unranked, send him a message or view his profile

Thu Apr 26, 2007 3:52 pm

And guess what? Miss a payment, lose your account. Lose your music.

Why rent the cow when you can buy it once and milk it forever?

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LaurieF said:

member since 15 Jun 2001 with 3467 posts, TMO Forum Mod, send him a message or view his profile

Thu Apr 26, 2007 4:19 pm

iTunes music is a waste of money? You're going to have to qualify that.

I can appreciate that for some people, a subscription service is a good thing. For some, it may even be better value for money.

But I think, like a lot of other unregistered guests, you're a troll.

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vasic said:

member since 09 Aug 2005 with 216 posts, unranked, send him a message or view his profile

Thu Apr 26, 2007 4:35 pm

Subscription is very risky for consumers. Many of those who have tried it with the likes of Rhapsody, Napster, etc. are already discovering how problematic this could be. Initially, it is great to have thousands of songs for just over a hundred bucks per year. The problem is, after say, five years (of iTunes dominance), when your Napster continues to lose money and finally goes out of business. You have spent some $600-700 on your music and you now have big fat nothing!

Even if iTunes were ever to go out of business, you can still listen to and burn your songs on a CD. As long as you have at least one authorised computer, your iTunes songs are alive and well. Meanwhile, your Napster songs will cease to play exactly one month after Napster goes out of business (or you stop paying).

I have CDs from the early 80s (when they first started coming out). That means, 20 years. Nobody in their sane mind expects Napster to stick around for the next 20 years. As for iTunes, I wouldn't be surprised.

This is why most people don't want to subscribe. This is why Jobs doesn't want to bother with the model.

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Biff said:

member since 08 Apr 2004 with 1479 posts, unranked, send him a message or view his profile

Thu Apr 26, 2007 5:25 pm

Quote
vasic wrote:
It has been discussed and beaten to death on these forums, but few of the participants here believed there was even the slightest of chances that we'd see DRM-free downloads on iTunes anytime soon, if ever.
That's for sure. I still can't believe it happened at all. And I'll continue to be shocked every time a label goes onboard with it.

Not that it really matters to me at the moment. I still buy all of my music on CD! When I want some more music I just go buy some used CDs. It's cheaper than buying the album on iTS, I get physical backup, and I can rip in whatever format I want! The future is now!

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gslusher said:

member since 13 Nov 2002 with 2003 posts, unranked, send him a message or view his profile

Thu Apr 26, 2007 5:58 pm

Quote
Guest wrote:
C'mon Steve! This is the reason I still don't use iTunes. It's such a waste of money to purchase iTunes music, but if I could pay a small monthly fee like 10 bucks, and have access to the entire catalog on my computer and my portable device (which is no longer an iPod), then I would use iTunes.

You can do just that with other services. Do hope, however, that the service you use doesn't go belly-up or suddenly change the subscription rate--which they can do at any time, with little to no notice.

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A guest said: (hide)

Thu Apr 26, 2007 6:49 pm

Quote
Engine Joe wrote:
Guest, I think SJ doesn't really care that you want a subscription model since you don't use an iPod. Not speaking about the TV/movie/video front, but strictly music, he'd rather you buy an iPod and never use the iTunes store than have you as a $10/mo subscriber and never buy an iPod.

Joe, you are very wrong. At least, according to SJ's responses to the legal problems in Europe restricting iTMS music to the iPod is not his fault, but the fault of the labels because they want DRM. (Really though, DRM has benefited Apple because the iTMS catalog is the largest of online stores at the moment, and if you want to play purchased music on a portable device you must buy and Apple iPod). If he's going to remove DRM that would open up the files to work on other devices. I used to have an iPod, but it died one month out of warranty. I found other devices that provide much more functionality and don't require that I use iTunes to sync, so it worked for me. Back then, iTMS purchases were only 128-bit which was just way too low to spend any money on to "own" which with Apple DRM you still didn't have total control over. But, if SJ wants to continue to limit iTMS songs to just the iPod, well, he's going to have serious legal troubles.

Quote
gslusher wrote:
Quote
Guest wrote:
C'mon Steve! This is the reason I still don't use iTunes. It's such a waste of money to purchase iTunes music, but if I could pay a small monthly fee like 10 bucks, and have access to the entire catalog on my computer and my portable device (which is no longer an iPod), then I would use iTunes.

You can do just that with other services. Do hope, however, that the service you use doesn't go belly-up or suddenly change the subscription rate--which they can do at any time, with little to no notice.

Yes, I know. I don't anticipate Yahoo, Microsoft or Real to go belly-up any time soon, these services have existed for years. I have used multiple services in the past, and continue to use Yahoo at the moment. That's my point though, I'd use iTunes if they did subscription, but the for the cost of 10 songs on iTunes, I can access the entire catalog at another service. Even if the increased prices 100% that'd still give me access to an entire catalog at the cost of 20 songs (some albums are bigger than that).

"Purchasing" music from iTunes just doesn't make financial sense to me until they change the way the music is delivered.

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