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I want my iTunes subscription service!


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August 16, 2005

I want my iTunes subscription service!

Peter Burrows

So it turns out that Apple has been asking its record label partners about the inner workings of the music subscription model. Now, I'd bet Apple is just keeping its options open, and doubt Steve Jobs is seriously considering making any move. I think he firmly believes, as he has said, that people want to "own" their music rather than "rent" it via an all-you-can-hear service for a monthly fee.

But what, exactly, is ownership once music is in the digital realm? As someone who has purchased songs on iTunes and also uses RealNetworks' Rhapsody service, I personally have a more secure sense of ownership with the latter. So long as the monthly bill is paid, I in a sense own almost every song I can think to ask for. My PC could crash, my iPod could be stolen, my house could burn down--but I could still log back on and hear what I want.

Buying music on iTunes isn't quite so foolproof. An example. Last week, I purchased a kid's album on iTunes in advance of a family roadtrip (Laurie Berkner's terrific "Whaddya Think of That," if you care). Alas, I had to wipe clean my PC and reinstall Windows upon my return (for totally unrelated reasons), but forgot to back-up my iTunes folder one last time before I did so. So when I got the PC back up and running and repopulated iTunes, I found that the album was no longer in my library. And since Apple only lets you download purchased music once, clicking on "Check for Purchased Music" didn't do the trick, either.

Now, I know I should have backed it up (and yes, I know I'll get notes from Mac fans saying my mistake was using Windows in the first place). True enough. But as a consumer, I'm not interested in logic. I resent having to pay another $10 so my kids can get their fill of "We are the Dinosaurs" and "I Love My Rooster".

An easy fix would be for Apple to make the necessary improvements so people can download music they've purchased more than once (and to multiple machines. That's another peeve of mine: why, if Apple has such a sophisticated server farm, can't I download "my" music to my office PC, just because I happened to purchase it on my home machine?).

But even more, I hope Apple will surprise us with an iTunes subscription service. Sure, the current offerings are far from perfect (more work is certainly needed on the new portable subscriptions, for example). And sure, nobody is making any money on these services so far--at least not much.

But Apple figured out the right model for the music download business, one that served its own purposes and those of its music industry partners. In the end, it's succeeded because Apple created a great--albeit imperfect--user experience, for which twenty-million-something iPod owners are thankful. But subscription services are another kind of user experience, that would appeal to many current customers and millions more. Who better than Apple to figure out the existing challenges, and get the subscription model right, too?

08:58 PM

Digital Music

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? I want my iTunes subscription service! from BusinessModelInnovation BusinessModelDesign

Great post over at BusinessWeek?? Tech Beat on the business model innovation issues Apple is facing.

Well put, but there is more to it: even as Apple concentrates on the sell-the-hardware-model of old, enhanced by iTMS it still needs alternativ... [Read More]

Tracked on August 17, 2005 11:23 AM

I have a great relationship with my landlords of 10+ years, and as long as I pay the rent each month (even if I'm a little late), I feel quite secure about ACCESS to the house I live in, but I think that, even as goodhearted as they are, my landlords would take exception to me asserting that I OWN the house.

There is a valid appeal in a sense of assured access, and the locus of responsibility for maintaining and preserving whatever resource, house or music collection, is certainly a major consideration. I definitely agree, that Apple should be able to accommodate replacement downloading of already purchased ITMS tracks.

But access and ownership are not synonymous, and regardless of which we prefer in any given circumstance and for whatever reason, I think we do ourselves and others a disservice by obscuring the distinction.

Posted by: John at August 17, 2005 11:31 AM

don't you know that once you purchased from itunes the music is always yours, when you log into your new computer, you can associate the music with that PC and the purchased music is there just like that!

also, with subscription, what happens if the subscription company goes out of business? the record labels changes their minds? you pay for 5 years, and suddently you end up with nothing???

Posted by: khyberny at August 17, 2005 11:36 AM

Well, yeah. It would be nice. But even the real world doesn't work that way.

Go buy a CD. Trash it. Take the trashed CD and the receipt to back to the store and see if they'll give you another one. Some places will, I'll admit, but most won't. At the very least, they may charge you a restocking fee.

Maybe that's what Apple should sell: iTunes Insurance. For $9.99 a month, you can redownload any music you have purchased... :^)

Posted by: Peter at August 17, 2005 12:15 PM

Since you've made the mistake of using Windoze, do as I do. My HD is too small for the 36 gigs of music that I have, so I keep my iTunes library on an external firewire drive (and that gets backed up as well to work PowerBook). That way when you have to reinstall windows every month, your music will be OK.

Posted by: AgingGeek at August 17, 2005 01:36 PM

Wait! You said you were doing this for a road trip, right? So that means you either burned a CD or you moved it to an iPod. You can just re-rip the CD or move the files off the iPod back onto your computer.

Problem solved. (Unless you were using your computer as the mp3 player in the car - not exactly an ideal solution.)

Posted by: Peter at August 17, 2005 09:14 PM

I like the idea of "iTunes Insurance". But how about selling it for $79-99 per year, or $29-49 for .Mac members? Plus, throw in a coupon for a free album on the iTMS, and I think quite a few would sign up.

BTW - to the author - I have read that other people in the same situation have contacted Apple's customer support and were eventually permitted to download their music again free of charge. Worth a shot; it doesn't cost anything to ask.

Posted by: Johnathan at August 18, 2005 01:07 AM

Try learning to partition your hard drive correctly...

Store the Windows installation on a 10 to 20 gig partition, C:.

Store all programs on another partition, D: - never install programs to C:

Store your date on another partition - E:

The fact that you prefer to have 'your' music in the hands of somebody else says a lot about how you feel about music. What happens in 50 years' time when you still want to access it all? I'll still have all mine, backed up to DVD-Rs, and to Blu-Rays, next year.

Posted by: Shaun Ryder at August 18, 2005 08:33 AM

Ownership of music is very simple: no restrictions on how many times you can listen, how long you can listen, how many copies you can make, or which players you can play the song on. Buying a CD is owning the music.

Posted by: Audiorich at August 22, 2005 05:12 PM

'Owning' digital music is not as secure as owning a CD. True you get the sense of ownership but realistically the likelihood of you losing that mp3 file is higher than music service going out of business.

When you're renting, sure, you're not guaranteed you can play the music forever, but for most renting services you can also buy the tracks just like in itunes. Think of subscription fee as an extra on top of your per-track fees which allows you to listen to many other tracks.

Posted by: YT at September 28, 2005 02:16 PM

RE: Owning the music if the company goes out of business:

What happens if HBO goes under? Do you own the movies you watched during the month? OF COURSE NOT!

So why are people so reluctant to pay $5/month for a customizable radio feed with no commercials? I just subscribed the other day to Yahoo Unlimited and I love it. I have been an iTunes user for a while (on both Mac and PC platforms), but this model works so well for me.

I listen to music at work all day, and I would shoot myself if I had to listen to the same CD everyday for 2 months (~$10 for 10 songs forever or 2 months of millions of songs). I just don't see the point in ever buying another CD (except for artwork and albums not available through these services).

Posted by: Jarrod at October 11, 2005 02:43 AM

Rent or buy? Hmm..

Fortunately, basic finance gives us some tools to make these decisions.

Given:

napster to go costs $15/month

Itunes tracks cost $1 each

interest rate (to borrow) is about 5%/year

Analysis:

Annualized napster fee is $180/year, which entitles you to a huge, essentially unlimited library. $180/5% is $3600. This means that an economically rational person would be indifferent between owning a 3600-track itunes library and subscribing to napster since the opportunity cost of having $3600 tied up in a music collection is $180, the cost of a yearly napster subscription.

Other considerations:

Napster gives you access to tens of thousands of tracks. If your musical tastes are wider than 3600 tracks, Napster is the clear choice.

People get tired of music in their collections, even a 3600-track collection. My little model could be modified to reflect the gradual obsolescence of the collection. If so, the advantage would move towards Napster.

If you had ripped music from CDs and you tire of the music. You can delete the music from your computer and sell the CDs, albeit at a hefty discount. My model doesn't account for this, but it's not material. As for music purchased from itunes, you can't resell that, of course.

Who thinks in terms like this, you ask? I'm an MBA student at UCDavis and this problem is more interesting than my tax homework!

I own an ipod and an ibook. I long for the day that Apple permits subscription music.

Posted by: Joaquin at October 12, 2005 05:08 AM

Hmm. For some reason, music subscription is still a problem for a lot of people.

The subscription model seems to work well for cable TV and Netflix.

Posted by: Joaquin at October 12, 2005 05:15 AM

I agree on the subscription model. I'm using Yahoo! at a mere $60 a YEAR....I've already saved way more than that on the albums I would have bought that I have downloaded to my notebook and Creative Zen Micro. Not to mention the fact that I can read a review or article about something that sounds interesting, and, in most cases, can immediately download and listen. If I don't like it, nothing lost. I've found some of my favorite music recently this way. And, if Yahoo kills the music service some day, I'll just go and buy the CDs that I can't live without. The subscription model is a WAY more innovative music technology than the (admittedly tech cool) iPod player. For some reason, everyone's drunk the Apple Kool-Aid on this one.

Posted by: Phil at October 12, 2005 02:08 PM

I like renting movies (subscribing) from netflix, because it is very rare that i watch a movie more than once. But i listen to my music innumerable times. i would rather own music, and rent movies.

Posted by: sandor at October 14, 2005 12:52 PM

Subscription services give you something very important: freedom. Everyone is free to choose. The choice is huge, both from the past and present. Those who only own music are not motivated to explore their tastes in music. They are more or less forced to relive the same experience (even if that's intrinsically boring at some point) or confide to the 'pull' of the entertainment markets.

I hope Apple will move to offering their catalogue on subscription. Only that will convince me to buy a so-much cherished iPod.

Posted by: Marius at October 15, 2005 11:14 AM

If you are like me and your musical tastes range from jazz to classical to rock and instrumental music then you have to love the ability to plug-in to a 1,000,000+ library of tunes at any time and listen to ENTIRE songs (not 30second samples) to your heart's content. If my mood changes, I update my playlists. And the best part my music is always with me. It's just like going to the library vs. going to Barnes-n-Noble. Plus if I really like the song I can always buy it but why do that when compressed music is a lossy conversion process anyway? I'd rather buy the CD off of half.com instead...

Posted by: Cliff at January 9, 2006 04:18 PM

I'm like Cliff. My tastes are varied, and I much prefer the diversity I can obtain from the online music services.

Besides, I'm not about to update my LP and cassette library with CDs. I'm too cheap to do that.

I am much more likely to try new music by having subscription access than I would otherwise.

Posted by: Richard at February 27, 2006 04:12 PM

Have any of you "own" your music fans - as if you can own anything with DRM encoded in it - heard of Netflix? Funny thing is as soon as I stop paying my subscription they stop letting me watch DVDs. I don't mind that - why would I mind the same with music? I mean I'll still buy a DVD I REALLY like, but what is great about Netflix and about Rhapsody is that I can try all sorts of media before I buy. Then if I like something enough I can go buy the CD - as in actually own my music aka play it on any music player or rip it in as many formats as I desire (including lossless) and the neat thing is I don't have to burn it to a CD to back it up because it is already on one. What I think is more insane is to purchase music from itunes with DRM in it. That's more like buying a house with a lock controlled by somebody else and they can choose when or how to let you in the house.

Posted by: Joe at March 25, 2007 02:19 AM

I would much rather subscribe to music than buy it piecemeal. I've already lost mp3's over the years, due to hard-drive crashes, moving computers, etc. It's a big pain to always try to keep a music library backed up and updated to new media as it comes out. I can usually do it for a few years, but it's not a thing I look forward to doing for a lifetime.

I use Rhapsody, and it works great. I pay one flat fee, and can listen to virutally any song I can think of. Every day, I can randomly pick some new artist or playlist and listen for a few tracks. If I like it, I can listen more, if not, nothing lost. On my Zen Vision player, I have no qualms about downloading every album that some artist has ever made, and then deleting the tracks I don't like. I feel so free to try out weird stuff that I would normally be cautious paying for.

The only thing I'm jealous of is the Apple hardware. I like the players, and the recent Apple TV. I just can't make the transition though... it would mean starting the long slow process of building up a library, at the cost of thousands, to have the same songs I listen to now with Rhapsody. I'm waiting for Apple to provide the subscription, then I'll switch.

Posted by: Phil at April 5, 2007 08:08 PM


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