speaking tuesday at a conference in paris, the brain behind itunes warned the music labels that raising music download prices would only cause an increase in piracy. i for one hope that they someday take a close look at wired’s chris anderson’s long tail article, especially this page which explains that lowering the price will result in higher sales and profits.
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Anderson also points out that a range of prices for music downloads may be the best alternative here. But really what Jobs is saying is that raising digital download costs will help the subscription model and force apple to move that direction, which they should anyway.
thanks for the great follow-up link.
subscription model doesn’t work for me. what happens when I stop paying?
Same as with cable.
It would only work for collectors as a supplement.
You can still buy. Rhapsody, Yahoo and Napster all give their members discounts when buying which could mitigate the subscription cost.
still not buying it.
the *poof* factor alone kills it for me.
A lot of people said people would never pay for cable. But I think music fans are especially proprietary and ownership based. The original Napster was more about stealing than sharing, for instance, people downloading shit they never listened to.
But having and sharing that much music is still an attractive offer to people who don’t spend their Sunday’s dirtying their fingers.
I believe that that enough people would rather have more access to more music than they could ever buy to make the subscription model as prevelant as say HBO in five ten years.
1) tv has historically been delivered as a service. music has pretty much always been delivered as a product. people expect to own their music; less so, their tv shows.
2) as tv is increasingly delivered as a product (via dvd, etc.), it’s becoming clear that people also want to own their tv programming. more people have seen “the sopranos” on dvd than on hbo. tivo has also changed the game: tv isn’t so much something programmed to you as it is a bunch of discreet pieces that you can watch at will, copy, and save.
3) dismissing the relatively small “dirty fingers” set in favor of the of joe average mainstream music fan makes sense to some degree, but it also misses the point about fanatics: they’re early adopters.
i was sort of surprised that every panel i attended at cmj ended up at some point in a conversation about music subscription models, and how nobody likes them. no, these aren’t the same people who buy their music at wal-mart, but they are the people who help establish trends. don’t ignore them.
businesses fanatics have shaped: netflix, tivo, the entire video game industry.
I do like music subscriptions. It’s the closest thing that will ever exist to the original Napster. Would I pay for one? Probably not. If I had kids, I definitely would, though.
I know the noveau tech hate music subscriptions.
These people are early adopters, but the really weathly were the first people to get HBO and are the first people who are getting music subscriptions.
OK a few points for agreement.
a. Some people will want music subscription.
b. The music industry is going to change dramatically in the next few years. 99 cents a download in untenable for the labels with their massive promotional overhead and the margins are tiny.
c. music subscriptions will change. I imagine they will look way more like cable television in the near future, with premium channels like The Beatles and Zeppelin.
d. P2P sharing changed music distribution. Applying old models to music is what the labels want to do. Is that really your premise?
To respond directly to your points:
1. tv was primarily free. it took decades for anyone to pay anything for it. music was made free by p2p sharing. people are shockingly tolerant of stealing software, which digital music basically is. People with enough disposable income will pay far more than $10 a month for music to avoid legal issues or the perception of some.
2. that people would pay for satellite radio and not for a portable subscription somewhat negates this point since music probably only draws about half of the some 5 million people that subsribe to Sirius and XM.
3. Why do they hate it? Because it used to be free. I get that. But why else?
“2. that people would pay for satellite radio and not for a portable subscription somewhat negates this point since music probably only draws about half of the some 5 million people that subsribe to Sirius and XM.”
I’m not really getting what you’re trying to say here. Are you saying that 2.5 million subscribe to Sirius/XM for music? That may be true. Does it negate the fact that “pure music” listeners have a different relationship to their content than, say “Baltimore Orioles fans” listening to a game broadcast at 7:30pm PDT? I think the ‘Yotta is saying that content ownership is getting *more* complicated, not less complicated.
Yes, on-demand music machines that let you choose songs out of the sky have a natural appeal, but I think it’s important to recognize that it’s a different model than HBO. In the HBO Sopranos model, you’re forgetting the “early adoption” premium of *seeing the content first* before those who buy it on dvd. what premium value does a music subscription provide? If I only own HBO for two shows, wouldn’t I rather BUY it instead of signing up for recurring costs? What happens when the series calls it quits? what happens when my approved storage repository runs out of space?
i just think it’s way more complicated than assuming that people are purely whining over what was once free.
the nouveau tech? who does that even refer to? seriously, seeing something like this as an ivory tower issue misses the point entirely. the issue media CEOs should consider: why haven’t (regular) people responded positively to our business model? could it be because we’re charging a lot of money for something that people can get more cheaply (or for free) elsewhere? and no, i’m not talking about computer geeks downloading albums via bittorrent.
one problem: yep, satellite radio is gonna give music subscription services a real run for their money. but like believe said, xm and sirius also cater to a much broader audience than just people who want to listen to music. if i’m gonna put $20 a month towards something, it’s gonna be the service that lets me listen to howard stern and the bbc in addition to hundreds of music narrowcasts. and i’m certainly gonna look elsewhere for an all-zeppelin station. (you’re accusing *me* of embracing old business models? you mean like selling people the same classic rock songs they’ve been listening to for free on terrestrial radio for the past 30 years?)
another problem: free internet radio will eventually become available in your car and on your home stereo, and there will be hundreds of thousands of music stations to choose from. this isn’t adam curry’s podcast we’re talking about here. this is mom listening to toby keith and willie nelson and the carter family on her sony internet radio that came stock in her minivan.
and although it goes without saying, internet radio will be free (as a bird).
pete, we’ve talked about this at length before. The Napster business model is simply not going to work for most of the people in our demographic. If the wealthy like it and are willing to pay for it, congratulations.
I simply don’t like monthly fees. I subscribe to Sirius, but I got their lifetime subscription. Same with Tivo. I’d like to do the same thing with Comcast, my cell phone, and any other bill I get on a monthly basis. But I’ll get back to that in a moment.
I just don’t know anyone whose musical sensibility shifts that dramatically on a given month. Sirius keeps me current; CDs I keep forever. I could care less if I’ll have access to Fat Joe’s “Move Back” as long as I pay 15 bucks a month forever.
Most people can’t stand getting a monthly bill. I don’t like iTunes because they have copy protection, but at least if I want one song, I can buy the one song and effectively keep it forever. Due to the high cost of cable/cell phones/etc, it’s pretty unrealistic to offer a lifetime subscription. Truthfully, I’d probably balk at the price if they ever tried such a thing. But why won’t Napster?
The biggest flaw in your cable TV/napster analogy is that cable TV is a shifting medium. Sure, you can record every episode of King of Queens, but more than likely, you just want to watch it each week. It isn’t like Gwen Stefani is coming out with a new single every week that we’re all going to gather on the couch to enjoy together. It isn’t like Fat Joe is going to break down the news stories of the day and explain how it affects my life. It’s just a bunch of songs I can access, and probably 90% that I will never want to listen to. I’d rather just own the remaining 10%.
I won’t do Napster, but I’m not the audience you’re trying to attract.
Another point you’re missing is that 99 cents a song is actually way too much. The music companies need to lower their overhead, and the cost of downloads is almost nothing for them. They aren’t even paying for the bandwidth/marketing/storage – Apple is.
There is no law that guarantees a business practice success in the future if it worked in the past. Music companies may very well go the way of the horse and buggy.
But I’m sure they’ll have a place when a couple decides to buy a CD for a romantic evening in Central Park.
I’m looking forward to free Internet radio being able to listened to anywhere. But I’d much rather be able to build at least some of my stations and listen to the same artists more than once an hour. I’d need a subscription for that.
Several million people have music subscriptions. Anderson himself loves Rhapsody and consistently uses as an icon of the long tail.
There will be millions more using these services as soon as compatible devices flood the market.
The noveau tech is my distracting rhetorical flourish used to baffle people who have an incomprehensible hate of music subscriptions. But honestly there is some short-term thinking haterism that is ingrained in this argument that bubbles up from a resentment of what free P2P stood for. I understand that. But when these services make it easier for countless more artists to make a real living off their music, I don’t think people will be so morally outraged. That the services haven’t done that yet is a flaw.
The premium value of a subscription is not having to buy every new release to listen to them all. Some people really like that. It is akin to watching Six Feet Under on Sunday.
These services encourage people to listen to more music and still allow you to puchase the music you want. What’s the beef?
I think you’re missing the point. How many people actually want to listen to every new release? I don’t. The best music I hear these days is off of blogs, and I have Sirius to keep me current. The main selling point for Sirius to me is that the music is commercial free, and there is a very wide array of channels/genres to listen to. FM/AM is unlistenable at this point.
My point isn’t that P2P was once free and I resent the fact that it isn’t free. My point is that due to P2P technologies, the old order of the music industry needs to just go away. They simply aren’t needed anymore for anything other than marketing purposes. You can record an album on a mac which will sound as good as much of the music out there, and many people do that. Many of these people want to get paid for their work, and others don’t care and just want to be heard.
Bands can always make money touring and selling t-shirts. The days of the music industry as they once were are coming to an end.
I think Napster, if it wants to survive, should look into providing a similar approach to Sirius. Have 100 stations, play a top-40 for each one that gets updated weekly, and let people download/save their favorite songs to station 101. At the very least, this will keep people from having to dig through endless piles of crap while looking for music. Further, it will differentiate the Napster service from the already free internet radio stations out there.
It’s really all a moot point – the technology will never be able to stop people who want to pirate music from pirating music. It’s always one step forward and two steps back.
you keep missing the point. nobody “hates” music subscription services. there is no irrational beef against you or your workplace here. this is an argument about business models — and in my mind, the model you’re defending will prove to be a failure. i’ve paid for music for my entire life and have no problem with continuing to do so. but the service your system provides is extremely limited, expensive (for what you get), and inflexible.
“The premium value of a subscription is not having to buy every new release to listen to them all. Some people really like that. It is akin to watching Six Feet Under on Sunday.”
the only people who want to hear new songs every week are weirdos and kids. i, for one, am a weirdo who is willing to take an informed risk on an old record i haven’t heard before in a shop. kids, on the other hand, need someone to tell them what is cool. will a subscription service tell them what’s cool? maybe…but will MTV and the radio tell them what’s cool for free? absolutely. and unless you make your service as cool or as free or as multimedia-driven as MTV, i think you’re fighting an uphillbattle.org.
for better or for worse, the people you want to service would frankly rather passively listen to the radio/MTV for free, hear a song they like, and download/buy it–not fish for it on a subscription service through the new releases list.
OK. If you don’t feel an irrational animosity to what you are arguing there’s a very simple resolution to this argument. We’ll see.
I bet that these services begin to thrive because they are not that present a vast amount of music, are relatively in expensive, and tailor to the individuals taste with things like personalized playlists and radio stations.
There’s enough room for a lot more business models out there because of technology. This model is probably the best for both the aritsts and consumers.
If you want a theorectical argument about how things are going to work out in the future, that seems pretty irrational.
There will be enough compatible players and consumer awareness to reckon this argument by then. Peace, noveau tech!
Wish you could edit these suckers:
I bet that these services begin to thrive because they present a vast amount of music, are relatively inexpensive, and tailor to the individuals taste with things like personalized playlists and radio stations.
BLAH! Also:
In a year from now, there will be enough compatible players and consumer awareness to reckon this argument. Peace until then, noveau tech!
An interesting thought that was touched upon is that Satellite radio sells a lifetime subscription for $500. This is equivalent to the Tivo price, too. But where do they make their money if they successfully convince all their customers to switch to a lifetime service? if you’re talking about 20 million users, that’s $10 billion. A lot for one year of radio service, but not a lot for a lifetime of an (inter?)national corporation. They must get a cut of product sales–it really seems like a good deal and I’d do a music subscription for that price.
Which brings me to ask, what IS the price that music subscriptions would need to charge to meet the “lifetime” levels they work at? $500 is equal to just over 2 years of a $20 subscription cost… I expect its much higher than that. With kids (as noted before) I’d consider that price. But probably not much more.
Yeah, that they are both doing that suggests that they will rely increasingly on ad revenue. It’s a move to gurantee circulation and ad rates.
I don’t think this will exist on the music side since the labels only make short-term contracts with the providers and can pull their product or demand new rates every few years.
pete, I was thinking about what you said.
1) Your cable analogy is flawed, because when I subscribe to cable, I’m allowed to record anything I want on my VCR, DVR, or computer. Once my subscription is gone, I get to keep everything I’ve saved.
2) Sirius had 70-90 commercial free stations. Those will most likely stay commercial free, but they have almost as many stations which run ads. The NFL station, uncensored comedy station, Stern, all of these have/will have ads.
The lifetime subscription model works because not everyone does it. It creates an influx of immediate money, give you a guaranteed subscriber to sell to advertisers, and the “lifetime” isn’t really lifetime. Tivo lifetime subscriptions last for the life of the product. Sirius allows you to transfer the subscription up to four times, so you get to either have four radios die on you or go through four hardware upgrades.
What irritates me about Napster more than anything else is the lack of freedom. I want something that will work on any MP3 player, no questions asked. This includes ipods, linux hardware, whatever. It’s also a pet peeve of mine about the iTunes music store.
Wrong!