Digital Home Thoughts: Jobs Puts the Kabosh on iTunes Subscriptions

"As you may or may not know, Apple will be renewing its iTunes contracts with the major music labels over the next few months. The music companies, always anxious for extra revenue, are hoping that iTunes will introduce a subscription model similar to that of Rhapsody or Napster. This would allow them to "rent" music for a monthly fee, and would lead to revenue boost due to the recurring subscription charges. Despite recent rumors, Steve Jobs isn't having it. He has said that "the subscription model has failed so far," and has suggested that customers generally prefer the iTunes sale model to any type of subscription service."



Why would Apple not offer a music subscription service? I suspect the reason is that Apple's already thin margins on music sales would go right down the tubes if they "rented" songs in bulk to users for a flat monthly fee. The bandwidth costs alone would be staggering. Now, if they would just do as Cringely has suggested, and use P2P networking to re-distribute song files, they just might be able to eek out a small profit from a subscription scheme. Then again, Jobs has been known to surprise us before...