Thursday, June 8, 2006
C|NET: All-you-can-eat iTunes--Why Not?
Posted by Jeremy Charette in "ARTICLE" @ 02:00 PM
"Going against conventional wisdom, I think Apple will soon introduce a subscription-based music and video service. Although music-subscription services have been in the digital music rotation for years now--and with relatively low success--Apple has repeatedly shunned this still intriguing distribution model for its iTunes Music Store. But the digital music space is still young, and as competition from the likes of WMP 11 and Urge heats--or, rather, warms--up, I believe Apple may shock us with its own bulletproof version of an all-you-can eat iTunes club. And consumers will lick it up. Steve Jobs time and again has stated that people want to own their music. Take, for example, this excerpt of an interview in Rolling Stone in December 2003: "These [music-subscription] services that are out there now are going to fail. Music Net's gonna fail, Press Play's gonna fail. Here's why: People don't want to buy their music as a subscription.""
I have to agree with James Kim here, though I think they'll take a wait and see approach. If URGE takes off, and threatens market share, Jobs will take the hit on revenue per customer in order to keep the customer base from dwindling. Subscription music is a good idea, economically, but it's a hard sell to consumers who are used to buying something and owning it, rather than "renting" it month to month. People don't view movies and music like they view cable TV or internet access. Unless that mindset changes, URGE and Napster's pay-to-play plans won't take off, and Apple won't feel threatened enough to jump in the pool with them.
I have to agree with James Kim here, though I think they'll take a wait and see approach. If URGE takes off, and threatens market share, Jobs will take the hit on revenue per customer in order to keep the customer base from dwindling. Subscription music is a good idea, economically, but it's a hard sell to consumers who are used to buying something and owning it, rather than "renting" it month to month. People don't view movies and music like they view cable TV or internet access. Unless that mindset changes, URGE and Napster's pay-to-play plans won't take off, and Apple won't feel threatened enough to jump in the pool with them.
