AfterDawn: News

Jobs: Consumers not interested in music subscription services

Apple Inc. CEO Steve Jobs has cast doubt on the rumors that Apple will be forced to implement a music subscription model alongside its pay-once download service. Apple's iTunes is responsible for about 2.5 billion legal music downloads since the store first launched. As the company is getting ready to negotiate terms with record companies again, many believe Apple may have to submit and offer a subscription model too.

Record companies like subscription services because it provides recurring income, and as soon as a customer doesn't pay a fee, they lose access to their catalog of music. "Never say never, but customers don't seem to be interested in it," Jobs told Reuters. "The subscription model has failed so far." He added that, "people want to own their music."



Apple is expected to push more record companies to explore DRM-free music downloads in the negotiations. "There are a lot of people in the other music companies who are very intrigued by it," Jobs said of the move to sell songs without copy-protection software. "They're thinking very hard about it right now." The company had predicted that by the end of the year, half of the songs on iTunes could be DRM-free. "I think we're going to achieve that," he said.

Source:
Reuters

Written by: James Delahunty @ 27 Apr 2007 19:00

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• 19 comments

• limelight

  I agree. The subscription method is nothing more than customized internet radio which brings constant revenue for companies simply for the fact to "scare" consumers so that if they cancel, they'll lose all thier music they paid for. In turn the consumer may feel that it would be worth more to them to keep the service rather than lose all their music they downloaded, sorted, etc.

  27.4.2007 19:12 #1

• ZippyDSM

  the trouble is most people would only pay 2-6 a month for the music they can download within reason(3-5GB a month) the napster plan at 15 a month is a bit OTT for your average consumer.

  27.4.2007 19:54 #2

• borhan9

  Subscription will not work the only thing i subscribe to is the aD newsletter maybe Itunes need something like that. But for free.

  27.4.2007 20:03 #3

• ZippyDSM

  Originally posted by borhan9:Subscription will not work the only thing i subscribe to is the aD newsletter maybe Itunes need something like that. But for free.you don't use Itunes anyway :P
  
  the only reason Subscription wont work is because they want to much money for it if 2$ a song is bad try 15 a month for unlimited songs...blah
  
  at 3-6$ a month they will rake in money like crazy....of coarse they don't want to make a "normal" profit noooo thats to easy....

  27.4.2007 20:42 #4

• SProdigy

  I disagree. I've subscribed to music services over the last 3 years and I really enjoy them, however, the REAL reason they have failed is simple: none of these services work with the iPod, which owns over 70% (or maybe even more) of their industry. And don't count the hack that RealNetworks exploited, because it was nothing but a hack and a cheap way for them to claim their Rhapsody service works with an iPod. When it does, it does poorly.
  
  Jobs' real concern is that subscription music will slow sales (why buy 100+ songs for .99 each when you can just "subscribe" to 1000 for $10 or so a month?) and the service would NEED DRM, which is exactly what he's trying to get rid of. He also knows that the record companies will say "X" song cannot be part of a subscription and MUST be purchased at .99 or some arbitrary price. Otherwise, no one with a brain would pay extra on top of a subscription to buy a DRM protected song, just to have the "rights" to burn "X" song to a CD when you can listen to it an unlimited amount of times on your iPod if you keep a subscription. Not having all of the music available as part of the subscription package actually ruins the value of the service and thus, does not justify the price. A DRM subscription model and a DRM iTunes Store would be total chaos.
  
  If Jobs were able to make all of the songs on iTunes available for subscription, and get rid of DRM on purchased music, it would work.

  27.4.2007 20:43 #5

• ZippyDSM

  SProdigy
  Sorry I would not spend 10 a month or 1$ a song, much like I feel the PS3 is only worth 400-450$ I have a limit on how much I get taken for.
  
  I'd rather toll threw ads and ad games for credits to get the music than pay 3 or 5X what I think tis worth.

  27.4.2007 20:58 #6

• borhan9

  Quote:you don't use Itunes anyway :PYour sadly mistaken I do own a Ipod and i only use Itunes to manage and transfer my music files.

  27.4.2007 21:24 #7

• ZippyDSM

  Quote:[quote]you don't use Itunes anyway :PYour sadly mistaken I do own a Ipod and i only use Itunes to manage and transfer my music files.[/quote]And you use Itunes online service to buy music?
  if so yes I am sorry ><
  LOL
  
  but would you pay 3-6 a month for "unlimited" music?

  27.4.2007 21:29 #8

• borhan9

  Quote:[quote][quote]you don't use Itunes anyway :PYour sadly mistaken I do own a Ipod and i only use Itunes to manage and transfer my music files.[/quote]And you use Itunes online service to buy music?
  if so yes I am sorry ><
  LOL
  
  but would you pay 3-6 a month for "unlimited" music?[/quote]Your forgiven and No i payed apple enough for the Ipod in the first place i am not paying for anything else :P

  27.4.2007 22:02 #9

• ZippyDSM

  Quote:[quote][quote][quote]you don't use Itunes anyway :PYour sadly mistaken I do own a Ipod and i only use Itunes to manage and transfer my music files.[/quote]And you use Itunes online service to buy music?
  if so yes I am sorry ><
  LOL
  
  but would you pay 3-6 a month for "unlimited" music?[/quote]Your forgiven and No i payed apple enough for the Ipod in the first place i am not paying for anything else :P[/quote]
  ====================================================================
  MA AHAHAHAAHAH I know the feeling :P

  27.4.2007 22:05 #10

• pigfister

  i totally agree that ppl want to own their music and not be limited to a months subscription.
  
  the record companies just want to be paid for the constant dribble they produce just for profit from the teenagers, and if this is the end of "manufactured bands" woo hoo, rejoice as i never want to hear another britney spears, west life, boy zone ever again. if i choose not to listen to this crap i sure as hell don't want any subscription funding future incarnations of this shit! As soon as the record industry realise that falling sales is because they cannot get away with producing crap as WE CAN CHOOSE just to download the one good song from an album, maybe they will wise up a little and produce real music with quality albums instead of the one good single and the rest crap for £10. grrrr rant over!!!

  28.4.2007 01:06 #11

• mspurloc

  Holy Cow! Somebody with power GETS IT.

  28.4.2007 07:57 #12

• duckNrun

  I've posted the numbers before peeps and the financial costs of buying music far exceeds the costs of renting it.
  
  As for wanting a 5-6 dollar plan... Yahoo gives you that plan now... you just cant take the music off your pc... unfair true enough.
  
  Who wants to pay $12 a month to rent music? The same people who pay $12 a month to get HBO on their tv. The same people who pay $18 a month to rent movies through Netflix.
  
  Paying a flat $12 a month fee for 50 years results in a lifetime costs of 7200 for OVER 2 MILLION+ songs you can take with your piortable device and play anywhere, anytime and as often as you like. Want to swap out your music... no prob... its the same as swapping out your music in your library via itunes!
  
  At iTunes rate of a buck a song you get 7200 songs for the same cost!
  
  **But you can take itunes everywhere you want and play it in the car, at a friends etc etc... You can do the same on subscriptions!
  
  ** But with itunes you OWN the music... NO YOU DONT!!! Read the fine print, compare owning the music on a CD with owning the music from itunes and tell me if there is a difference... THERE IS!!
  
  The main problem with all the services iTunes included is the lower audio quality that you end up with. I do not want to rent or buy music at 128 bitrate. I want 320 or better yet waves/CDA's. Yeah they sound 'OK' over crappy little earbuds on a portable device but pump that same music through a quality home stereo and there is a difference between the sound quality of online bought music and CD's.
  
  Finally:
  The point is valid about the iPod screwing with acceptance of subscription services. And if Jobs was willing to put his money where his mouth is he would trial a subscription service and actually gather data to SEE if it would succeed (GASP! To actually find out what consumers want instead of speaking for them form the base of what best for the business!) When the device that commands 80% of the market can only work with iTunes (in regards to online music stores since obvioulsy itunes works with mp3 you own) which does not support subscriptions then its only natural (and corrupt!) business sense to extrapolate (improperly of course) that MOST people dont want subscriptions because MOST people buy a player that doesn't support subscriptions.. THIS IS A FALLACY OF LOGIC!
  
  It's like saying since MOST people buy gasoline powered cars then MOST people don't want alternative fuels that are better for the environment
  
  Or saying
  
  Since most people work 40+ hours a week, and sleep 40+ hours a week Commute to work 8 hours a week, do chores 5 hours a week then its obvious that most people dont want to be fishing or boating or gaming instead because instead of doing those things they do the things that allow them to pay their bills, eat and have clean clothes!
  
  --nuff said

  28.4.2007 17:47 #13

• pigfister

  @ duckNrun:
  
  i dont want to fund more manufactured music, i want to give the money to quality artists ONLY so they can benefit from their sale and not the latest boy/girl band funded from a subscription that i am paying for.
  
  i am sick of the crap them churn out just for profit if i can choose to only purchase the one good song from an album that crappy band will diminish fast maybe renting works for you but if i want to listen to lots of different music and not own it, i just turn on my radio!

  29.4.2007 01:46 #14

• duckNrun

  so dont listen to that kind of music. Subscription service do not make you download what they want you to hear. They are just like iTubnes in that regards. YOU CHOOSE what to downnload. YOU CHOOSE what to put on your portable device. YOU CHOOSE to keep it or delete it. I am confused by this concept that you are being forced to listen to music you dont want to hear and supporting artisits you dont want to support You claim that if that was the case you would just turn on the radio...If you turn on the radio i guarantee YOU WILL hear these types of artists and support them as well!
  
  On the other hand a subscription service is like MY radio station... it only plays the songs that I want to hear.
  
  Your argument if used against a video rental service would make it seem like Netflix or Blockbuster force you to watch BrokeBack Mountain when what you really wanted to rent was RAMBO First Blood Part 1. The argument is not based upon fact or logic I am sorry. It's not. Furthermore I never said subscriptions/rentals were for everyone and I would not advocate for it to be the only system of acquiring music available. I am all for choice even if that includes choices I am never going to use.
  
  Truth be told I do not subscribe to ANY ONLINE music rental or ripoff(P2P) service I also dont subscribe to iTunes. I dont like the bitrates, I dont like the DRM restrictions. If I could get a subscription service that would offer me CD quality songs I WOULD join in a heartbeat. When I want to buy a song from the web I go to ALLOFMP3.COM and buy it at 320 bitrate for about 17 cents a song. Which in MY mind is a fair price for a downloaded song in compressed format without the costs of manufacturing the physical media and inserts and shipping etc etc.
  
  Ideally a subscription service will have available the same content as on a purchase service and the revenue made from your fees will fund the artists you listen to. It would be nice to have a service that included the indie groups as well. Also it would be nice for a service to allow a section for 'unsigned' bands to upload content to and receive a portion based upon the number of users who listen to their music within a month billing cycle.
  
  I see no reason why a subscription service would only benefit the bubble gum garbage that is otherwise played on the radio but not benefit the other groups who are among the other 2 millon plus songs available.
  
  Also ideally a music store would be a combo of the two types of offers. Provide each consumer what they want. You see this in the movie rental stores. You can rent the movie or you can buy the movie as well... both types of customers are being satisfied. They are also meeting the needs of the customer who may wish to check out a movie BEFORE spending the purchase price on it...a common theme that seems to circle on these boards to justify the use of unpaid peer to peer. To check out a song or a band before buying the CD. For a small fee this would enable one to check out all the bands and all the songs they want before buying the single or the CD. Susbcribe for 5 bucks a month and when you find something you MUST HAVE FOREVER offer it as a DRM FREE non compressed wav file that can be burned into a cda file or converted to the compressed form of the purchasers choice while still allowing them to keep the quality copy just as if they bought a cd.
  
  THEN the costs of the purchased song could be reduced for those subscribers since they have already subsidized the artist via the subscription fee. Other users who are only purchase only could still pay the flat fee rate to buy the song without a discount...
  
  EVERYONE WINS, nobody is hurt or loses what they want out of a service, choice reigns supreme...
  
  Now why would consumers be against that?
  
  Don't be like the RIAA and try to tell other music users how they have to listen to music. Give them choices. DEMAND choices be given. APPLAUD the choices when we are given and you will see more choices arise... some that you MAY want to use.

  29.4.2007 07:24 #15

• thunkit

  At the risk of repeating in one paragraph what has been said here in many, let's see.
  Pay $12 a month for a subscription service for 10 months = $120.
  
  At end of 10 months, stop paying, have nothing.
  
  Pay .99 per song for 121 songs. At end of 12 months, still have 121 songs.
  
  DO THE MATH!
  
  Of course there is always the option of paying that $12 a month for the rest of your life and retaining these songs, but why on God's green earth would you want to do that? Unless you are of the opinion that all those songs you downloaded now are realy crap and you'll want to replace them soon with the latest and greatest crap, until some more new crap comes along to replace that with..... I only download what I LIKE, therefore it will stay on my player pretty much forever, with the rare exception of really getting tired of hearing something that I previously loved. A new song comes out that I love? Buy it and add it, it's that simple, and a lot more cost effective in the long run.
  Two valid points were made her that apply though. .99 is way too expensive for something that costs them a lot less than the manufqcuring and distribution of a cd, they are ripping us off at this rate, big time. Of course, I'm sure the people running these things are contributing heavily to the record store owners retirement fund, seeing as they essentially put them ut of business, and will want to make up for that because it's only right. Right? WRONG! Greedy little bastards are making it hand over fist!
  Secondly, the 128 bit quality is a real issue. Whether we are renting or buying, we are getting less quality for more money.
  I guess it's the difference between leasing a car and buying one in a way, but I never eally understood car leasing either, except in very limited circumstances.

  5.5.2007 00:47 #16

• thunkit

  Originally posted by thunkit:At the risk of repeating in one paragraph what has been said here in many, let's see.
  Pay $12 a month for a subscription service for 10 months = $120.
  
  At end of 10 months, stop paying, have nothing.
  
  Pay .99 per song for 121 songs. At end of 12 months, still have 121 songs.
  
  DO THE MATH!
  
  Of course there is always the option of paying that $12 a month for the rest of your life and retaining these songs, but why on God's green earth would you want to do that? Unless you are of the opinion that all those songs you downloaded now really are crap and you'll want to replace them soon with the latest and greatest crap, until some more new crap comes along to replace that with..... I only download what I LIKE, therefore it will stay on my player pretty much forever, with the rare exception of really getting tired of hearing something that I previously loved. A new song comes out that I love? Buy it and add it, it's that simple, and a lot more cost effective in the long run.
  Two valid points were made here that apply though. .99 is way too expensive for something that costs them a lot less than the manufacturing and distribution of a cd, they are ripping us off at this rate, big time. Of course, I'm sure the people running these things are contributing heavily to the record store owners retirement fund, seeing as they essentially put them out of business, and will want to make up for that because it's only right. Right? WRONG! Greedy little bastards are making it hand over fist!
  Secondly, the 128 bit quality is a real issue. Whether we are renting or buying, we are getting less quality for more money.
  I guess it's the difference between leasing a car and buying one in a way, but I never eally understood car leasing either, except in very limited circumstances.

  5.5.2007 00:51 #17

• thunkit

  Quote:Originally posted by thunkit:At the risk of repeating in one paragraph what has been said here in many, let's see.
  Pay $12 a month for a subscription service for 10 months = $120.
  
  At end of 10 months, stop paying, have nothing.
  
  Pay .99 per song for 121 songs. At end of 12 months, still have 121 songs.
  
  DO THE MATH!
  
  Of course there is always the option of paying that $12 a month for the rest of your life and retaining these songs, but why on God's green earth would you want to do that? Unless you are of the opinion that all those songs you downloaded now really are crap and you'll want to replace them soon with the latest and greatest crap, until some more new crap comes along to replace that with..... I only download what I LIKE, therefore it will stay on my player pretty much forever, with the rare exception of really getting tired of hearing something that I previously loved. A new song comes out that I love? Buy it and add it, it's that simple, and a lot more cost effective in the long run.
  Two valid points were made here that apply though. .99 is way too expensive for something that costs them a lot less than the manufacturing and distribution of a cd, they are ripping us off at this rate, big time. Of course, I'm sure the people running these things are contributing heavily to the record store owners retirement fund, seeing as they essentially put them out of business, and will want to make up for that because it's only right. Right? WRONG! Greedy little bastards are making it hand over fist!
  Secondly, the 128 bit quality is a real issue. Whether we are renting or buying, we are getting less quality for more money.
  I guess it's the difference between leasing a car and buying one in a way, but I never really understood car leasing either, except in very limited circumstances.

  5.5.2007 01:00 #18

• pigfister

  @ duckNrun:
  
  i use:
  
  http://www.pandora.com/ & http://www.last.fm/
  
  so i can listen to whatever song i like whenever i want to, so just like the rental service i can select to listen to only what i wish to and ignore the rubbish with customisable streaming radio and its FREE and i'm not funding the constant dribble that the media companies throw at us all and any music i purchase is my own for life.

  5.5.2007 07:34 #19