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March 19, 2008

music

Apple may offer all-you-can-eat-music (also, free salad bar and breadsticks)

Posted Mar. 19, ’08, 9:01 AM PT by Dan Moren
Category | Music

All you can eatIf Steve Jobs had a mantra, it might be this: if at first you don’t succeed, change the rules of the game. The Financial Times reports that Apple is engaged in talks with the record labels to create a new model of digital music distribution. To wit, akin to the Total Music plan that Universal was pimping, the plan would potentially involve increasing the price of iPods in exchange for unlimited access to the labels’ music libraries.

Steve Jobs has long been dismissive of the subscription model for music, saying that people want to own their music. This story, however, differentiates this package model from a subscription deal, by pointing out that Apple may consider a subscription model for iPhones, since those customers are already in the habit of paying a monthly fee.

While the ideas are interesting, what worries me is the mechanism for enforcing these plans. It seems pretty likely that some sort of DRM would be required—that would seem a step backwards in this era where so many stores are switching to offering DRM-free tracks.

Apple, however, has been left out in the cold in that realm, continuing to offer DRM-free music from only one major label, EMI. One common theory behind the lack of DRM-free content on the iTunes Store has been that the labels want to reduce Apple’s dominance in the music download arena, setting up others, such as Amazon, as competitors. So, given that this deal would presumably provide free access to the extensive catalogs of the labels for those who buy music from Apple, why would the labels—pardon the pun—change their tune?

As The O’Jays so eloquently put it: for that lean, mean, mean, green.

This is a perfect example of the record companies’ overcoming whatever they have that passes for principles in the service of greed. If the FT’s report is accurate, the sticking point between Apple and the labels’ negotiations is just how much money Apple will be willing to give the music industry for access to the libraries: in a deal with Nokia, the labels are netting $80 per device, while Apple is offering a figure more around the $20 mark. One wonders if $50 would be common ground. Regardless, we know that Universal CEO Doug Morris has long salivated over the prospect of getting a cut of iPod sales—the only thing that I’m guessing keeps him awake at night is that he’d actually have to give up something in return, unlike his deal with Microsoft.

The most interesting tidbit in the report, however, is this:

The subscription models under discussion in the music industry include the provision for customers to keep up to 40 or 50 tracks a year, which they would retain even if they changed their device or their subscription lapses.
This is among the biggest sticking points in the DRM-based subscription model: once you stop paying the subscription fee, all that lovely music you’ve paid for goes right out the window. Though, I have to say I don’t necessarily relish the idea of having to decide which fifty tracks get to live in peace and harmony, and which disappear forever into the ether, but who knows? It could be fun.

All of this would be an interesting about-face for Apple, but perhaps given their recent incorporation of movie rentals, they are revisiting their business model for digital media. Keeping things fresh, you might say. While we likely won’t know for some time exactly how this will all play out, it’s certainly has the potential to be a game-changer.

I put the question to you, readers: would you like an iTunes subscription model? How about paying extra for an iPod for unlimited music access? What would make that appeal to you, and what potential limitations would be deal breakers? Sound off, below.


8 Comments

fletcher Author Profile Page said:

I don't really want a subscription model. I'm always suspicious when I can't make sense of a business model. I only see one way that this business model makes sense for the labels.

I see this as yet another way for the labels to screw the artists out of royalties. How could it possibly be in the label's best interest to make less money off each music consumer? It only makes sense if the labels get to pocket all that money rather than passing it on. The labels want to switch to a model where they make money licensing their back catalog and the artists get nothing.

Instead, I try to buy from smaller labels and direct from artists. I support artists because I like their music. I want them to make more of it. It is in my best interest for me to ensure, or at least hope, that more of my purchase winds up in the artists' hands rather than in label and music store overhead. Or, subscription fees which boil down to zero royalties.

March 19, 2008 9:20 AM
Anonymous Coward said:

No way in H*** am I going to submit to a subscription model. I'll become a Torrent user first. I'll also not likely be buying a new iPod if this happens either. I'm not giving the labels $50 for the privilege.

March 19, 2008 9:52 AM
krye said:

This is BS. iPods are expensive enough. Jobs has said over and over in the past that the vast majority of the music on iPods has not been obtained from the iTunes stores. And he's used that argument to refute the "monopoly" accusations.

I for one like my store-bought originals. I don't buy digital downloads, and I don't plant to. I'll be damned if I'm going to pay extra for an iPod for a subscription service I'm not going to use.

And what's this "used to paying a fee" business? If I already paid a monthly fee for the iPhone, I'd be less likely to want to pay even more for an additional music plan. The AT&T plans are expensive enough.

Come on Apple, don't do this to us.

March 19, 2008 10:20 AM
Tony Di Giacomo said:

Why should I, or anyone, pay a "fee" on top of the price of an iPod if I buy CD's and rip them. Wouldn't that be like paying the Music Industry twice? It seems to me that its assumed that either we "steal" music or everyone who buys music online should be penalized for not buying overpriced CDs. (Granted CDs actually have better sound quality and we choose the bit rate we want, nonetheless they are still overpriced.)
And as far as iPhone users already in the habit of paying a monthly fee, that is no excuse to switch over to a subscription model. What part of "owning" my music, like in the days before the internet and computers, don't they understand??
Yes I know we don't really own the music or the movies on CDs and DVDs, but its Hollywood's advertising ("own it on Tuesday" ) that pushes this mentality.
Sorry for the the rant, but this issue is just getting old.

March 19, 2008 10:25 AM
Dan Moren Author Profile Page said:

Well, of course, we don't know the details of what the system might entail, but my guess is that Apple wouldn't force the payment on those that don't want it, for exactly the reasons you guys point to. I was figuring that it would be an optional add-on: i.e., pay $50 extra when you buy an iPod and get free access to the music libraries. Would that change your opinion of the program?

March 19, 2008 10:45 AM
Paul Whitelock said:

I'm a big fan of subscription music because before I subscribed I easily wasted more than the cost of the service buying CDs that I found I didn't really like or that I only listened to a few times. I now use a subscription service to explore new bands and if I find something i really like, I buy the CD. If an album has one good song on it or if it becomes boring after a couple of plays, I haven't wasted my money on a CD. On the other side, I've found many artists that have now become my favorites because I can listen to whatever I want with no risk of wasting money. Thanks to my music subscription when I buy a CD it's because I like it, not because I THINK I might like it.

March 19, 2008 11:31 AM
Oscillate said:

A huge step backwards. I like the one stop shop for all my entertainment needs idea that is Itunes, and I can't wait for the movie catalog to increase. But when it comes to music I have always purchased the stuff I really like, I could not imagine having to subscribe, and not own. If I don't like it enough to own, then I can easily turn it off or walk away from it, and not go back to it for another listen. Universal needs a clue! It's bad enough Apple gave into the American Idol crap, please Apple not this!!

March 19, 2008 11:48 AM
Dave-O said:

I'm confused.

1. iPods aren't expensive enough? Especially the touch.

2. Are we paying extra for the iPod AND a monthly fee? No thanks.

As for the iPhone comment, I'm used to paying a monthly fee for an ongoing service. I am not used to paying a fee to have access to a service I will infrequently use. As with Netflix, there is no way I would utilize a subscription enough to justify the cost. I'm better off paying for the song/movie rental.

March 19, 2008 12:45 PM

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