Apple's Jobs still not keen on iTunes subscription service

[AppleInsider]

Apple chief executive Steve Jobs on Wednesday maintained his view that customers would rather own their music than rent it, suggesting he's unlikely to give in to calls from the music industry to add a subscription-based model to iTunes.

"Never say never, but customers don't seem to be interested in it," Jobs told Reuters in an interview after Apple reported blow-out quarterly results. "The subscription model has failed so far."

Jobs' comments come at a time when Apple is believed to be preparing for iTunes licensing renegotiating with several of the music industry's largest labels. As part of those talks, several of the labels are expected to badger the Apple chief to add a subscription model to its industry-leading iTunes Store.

The labels, which are battling an ongoing decline in sales of compact discs and the simultaneous proliferation of illegal music downloads through peer-to-peer file sharing networks, are touting the potential of subscription services to boost their revenues. They believe a subscription model would increase the consumption of music and allow them to reap monthly payments in addition to small licensing fees each time songs are played.

Thus far, however, Jobs appears poised to stick with Apple's current a-la-carte and album download model, which has catapulted his firm to the forefront of the digital download business. Since its inception back in 2003, the company's iTunes music store has sold more than 2.5 billion songs worldwide.

"People want to own their music," Jobs said.

For its part in the impending negotiations, Apple is expected to press the music labels for further concessions on selling music without copy-protection software known as digital rights management (DRM). In a landmark deal announced earlier this month, EMI Group -- the third largest music label -- announced that it would begin selling DRM-free tracks on iTunes in May.

"There are a lot of people in the other music companies who are very intrigued by it," Jobs said of the move. "They're thinking very hard about it right now."

The Apple chief executive is hoping pressure from the EMI move weighs on three of the other big labels -- Universal, Sony BMG, and Warner Music -- essentially forcing them to follow suit in order to remain competitive.

"We've said by the end of this year, over half of the songs we offer on iTunes we believe will be in DRM-free versions," Jobs told Reuters. "I think we're going to achieve that."

[ View this article at AppleInsider.com ]

[ Digg this story ]

[JeffDM]

"The subscription model has failed so far."

Well, for completeness' sake, if iTunes wasn't around, the digital download purchase model probably would have failed too, but iTunes did it right. I can imagine that if iTunes did subscription right that it too could succeed despite the previous history of failures with other implementations by other companies.

[BlackSummerNight]

I just want the subscription service for the Movies/TV shows. I don't need to watch missed TV shows more that once. But that's just me.

[kilraq]

Originally Posted by BlackSummerNight

I just want the subscription service for the Movies/TV shows. I don't need to watch missed TV shows more that once. But that's just me.

Agreed on that Black. Shows are ok, if I didn't have to turn on the bloody TV and could just watch some shows on my Mac while doing my other work I'd be a happy camper. I dont WANT to buy most of the television shows that the networks throws down our face. A subscription model would be amazing here.

You could have it all under a month subscription service. There could be catagories to check what you want to watch. New, Comedy, Animated, Drama, etc etc all for viewing. And I do think the news needs to be in there, without that it there would be a lot of people who wouldn't buy in.

Well here hoping.

[Producer]

I want a subscription service and this would be my idea assuming it works out financially.

Unlimitted Music: $12.99/month $9.99 with a year contract
AND you can buy tunes for a reduced rate ideally 39 cents ..

Add to this a movie subscription service to compete against netflix.

Add to the at VOIP/Mobilebservice

Add Broadband

Add all in one price.

semi off topic.. but the fcc is licensing new bands that will be great for superfast wireless.. Hmmm Google/Apple I'm really curious if Google bids on this.

[melgross]

Originally Posted by BlackSummerNight

I just want the subscription service for the Movies/TV shows. I don't need to watch missed TV shows more that once. But that's just me.

No, it makes more sense to have that for Tv and movies.

[DeaPeaJay]

Originally Posted by melgross

No, it makes more sense to have that for Tv and movies.

That's what he said

EDIT: Oh, I get it. you're being petty over the slash? my my

[melgross]

Originally Posted by DeaPeaJay

That's what he said

I know, I was agreeing.

You mistook what I said.

At the end he said that he might be the only one thinking that.

I said no (meaning that he wasn't the only one), that it WAS a good idea for Tv and movies.

[melgross]

Originally Posted by DeaPeaJay

That's what he said

EDIT: Oh, I get it. you're being petty over the slash? my my

Shame on you! I don't do that.

[TBaggins]

I hope Stevie J is more open-minded here than he lets on, and is just striking a hard pose on the eve of negotiations for strategic reasons. He really should offer subscriptions (alongside the current buying options for two reasons):

1- It heads off Microsoft at the pass. The hard drive Zune is dead-as-a-doornail once the 6G touchscreen iPod comes out later this year, and any flash Zunes that come out will just be sad Nano-wannabees.

The only way for MS to keep the Zune in the game will be to offer Zunes 'FREE with a 2-year subscription to the Zune Marketplace' or some similar nonsense. Wireless carriers have used this model with great success for many years with cellphones and cellular service... it does work. But if Apple offers the same thing as an option, Microsoft drops a fudgie in its drawers, as the Zune's last best hope goes by-bye.

2- You usually can't get something for nothing. Jobs wants DRM-free music from the major labels, the major labels want subscription from Jobs. The deal to be made here seems to be pretty obvious.

Sure, EMI caved for the sole concession of getting higher prices for DRM-free, but EMI was in especially dire straits... though the other labels still do need download revenue to offset declining CD revenue as much as possible.

I don't think it hurts Apple at all to offer subscription alongside their current 'buy the music' model. Let's hope they do.

.

[qmac73]

Originally Posted by TBaggins

I hope Stevie J is more open-minded here than he lets on, and is just striking a hard pose on the eve of negotiations for strategic reasons. He really should offer subscriptions (alongside the current buying options for two reasons):

1- It heads off Microsoft at the pass. The hard drive Zune is dead-as-a-doornail once the 6G touchscreen iPod comes out later this year, and any flash Zunes that come out will just be sad Nano-wannabees.

The only way for MS to keep the Zune in the game will be to offer Zunes 'FREE with a 2-year subscription to the Zune Marketplace' or some similar nonsense. Wireless carriers have used this model with great success for many years with cellphones and cellular service... it does work. But if Apple offers the same thing as an option, Microsoft drops a fudgie in its drawe, as the Zune's last best hope goes by-bye.

2- You usually can't get something for nothing. Jobs wants DRM-free music from the major labels, the major labels want subscription from Jobs. The deal to be made here seems to be pretty obvious.

Sure, EMI caved for the sole concession of getting higher prices for DRM-free, but EMI was in especially dire straits... though the other labels still do need download revenue to offset declining CD revenue as much as possible.

I don't think it hurts Apple at all to offer subscription alongside their current 'buy the music' model. Let's hope they do.

.

There is absolutely no way whatsoever that I am ever, EVER going to pay a subscription, Ever.
Why? I don't buy music often enough to make it worthwhile (OK, so I could just continue with the pay per track model, which works fine for me already), secondly, i want to own what I buy- and thirdly I utterly object to lining some greedy music exec's pocket for doing nothing.

Part of the problem is that by being greedy in the first place - £15 in the UK for a CD, or 79p for a download ( which, given the current exchange rate is $28 or $1.57 for the single) is just way too much. While I do not advocate stealing music, the only way that the music companies are going to win on this one in the long run is by lowering the prices they charge for CD's and downloads. My wife, who is far cleverer than I am tells me that this is what they call in the trade a loss leader. You make money by selling at a lower cost but in greater volume.

PS- while I think that it is the ugliest thing ever, don't write the Zune off just yet, or zune market place. I remember experts telling us that windows mobile was a dead duck a few years back....

[marshall]

Future story:

Steve Jobs earlier stated that "by the end of this year, over half of the songs we offer on iTunes we believe will be in DRM-free versions." However, that timeframe is being pushed out 4-6 months. Apple spokespeople have announced, "We were busy focusing on getting Leopard out the door, and just didn't have enough staff to get all the work done on both projects."

[JeffDM]

Originally Posted by qmac73

There is absolutely no way whatsoever that I am ever, EVER going to pay a subscription, Ever.
Why? I don't buy music often enough to make it worthwhile (OK, so I could just continue with the pay per track model, which works fine for me already), secondly, i want to own what I buy- and thirdly I utterly object to lining some greedy music exec's pocket for doing nothing.

It's not nothing. You would get unconditional access to a few million tracks, hundreds of thousands of albums for the cost of one CD a month. If you don't listen to music much, then it's not a good deal, but if you do, then it's an opportunity to sample everything that you couldn't afford otherwise.

[Mr. Me]

Originally Posted by JeffDM

... I can imagine that if iTunes did subscription right that it too could succeed despite the previous history of failures with other implementations by other companies.

A music subscription service is not a good idea done wrong; it is a bad idea, period. The music-buying public cannot have been any clearer on the subject. They want to own their music. If there were some way to make a subscription service work, then someone would have done so. If Apple had some knowledge that escaped everyone else, then it would have implemented it. In doing so, it would have made the labels very happy and a lot of money for itself to boot. In not developing a subscription service, Apple is not leaving money on the table because there is no money on that table.

[JeffDM]

Originally Posted by Mr. Me

A music subscription service is not a good idea done wrong; it is a bad idea, period. The music-buying public cannot have been any clearer on the subject. They want to own their music. If there were some way to make a subscription service work, then someone would have done so. If Apple had some knowledge that escaped everyone else, then it would have implemented it. In doing so, it would have made the labels very happy and a lot of money for itself to boot. In not developing a subscription service, Apple is not leaving money on the table because there is no money on that table.

The reason I worded my post that way is because there's really no money in anyone that's not iTunes in selling downloaded songs either. As such, I think the comparison is apt. If the competitors can't make song sales work, then how can they make subscriptions work?

[richieg261]

I have never understood why people are not that keen with a subscription model. If you purchase just two/three albums a month, then a subscription is a bargain. I listen to so much music it is unbelievable. I also don't get the "oops, i forgot to backup all my DRM-tracks" scenario, as you are fully protected with a subscription. For instance, if I wipe my Windows OS off my PC right now, install Windows and Napster, my whole 30,000+ track list is automatically restored from Napster's server.

This is the only reason why I am still shafted with Windows/Napster/Sandisk Sansa, and I don't pick up my iPod anymore. I only use iTMS for the free download each week and that is it.

The only downside with Napster is the occasional removal of tracks from their database, which is irritating, when a track you like listening to cannot be played any more. Other than that, it is a brilliant service!

If I had the opportunity to use Napster or iTunes for subscription, it would be iTunes.

[-cj-]

I'm not pro-subscription, but if it were going to work, i think the subscription rate would have to be even cheaper. I'll still want to buy music, so maybe $5.99/month to try out all the music I want and then $.99 for the songs I want to keep might work. But if the 30 second samples offered on iTune were chosen more carefully, I wouldn't even need that.

[richieg261]

Originally Posted by -cj-

I'm not pro-subscription, but if it were going to work, i think the subscription rate would have to be even cheaper. I'll still want to buy music, so maybe $5.99/month to try out all the music I want and then $.99 for the songs I want to keep might work. But if the 30 second samples offered on iTune were chosen more carefully, I wouldn't even need that.

In the UK $6 is now £3, and that would not even buy you one McDonald's meal deal here! :S

The way I see it, an "infinite" amount of music a month, or one burger, one fries and one drink... go figure!

[melgross]

I see nothing wrong with subscriptions per se. But most people simply don't listen to different songs all the time. They want to listen to specific ones. While in the short run, listening that way through subscription may seem cheaper, in the long run it's not.

If you listen 90% to 1,000 songs, and only that 10% to something different all of the time, it may be worthwhile, depending on the price of the subscription, which can be over $15 a month.

But if ypu also buy music on CD's, then that may not pay. I know few people who only get their music through subscription.

[richieg261]

Originally Posted by melgross

I see nothing wrong with subscriptions per se. But most people simply don't listen to different songs all the time. They want to listen to specific ones. While in the short run, listening that way through subscription may seem cheaper, in the long run it's not.

If you listen 90% to 1,000 songs, and only that 10% to something different all of the time, it may be worthwhile, depending on the price of the subscription, which can be over $15 a month.

But if ypu also buy music on CD's, then that may not pay. I know few people who only get their music through subscription.

Napster-to-go is $14.99 per month. That is equivalent of 15 normal itunes downloads. If you download less than 15 tracks per month from iTunes, then it is more expensive, if you download more, then it is not. The long term cost argument is a myth if you look at it from the perspective "how much do I actually spend on music a month?". For most people who like music but do not download illegally, it is probably more than $14.99

[DaveGee]

Originally Posted by TBaggins

I hope Stevie J is more open-minded here than he lets on....

Drat! Where is that emoticon with the million laughing smiley faces go when you really really need it?

D

[Porchland]

Originally Posted by qmac73

There is absolutely no way whatsoever that I am ever, EVER going to pay a subscription, Ever.

But wouldn't you like to have the choice?

People seem to be viewing music rental vs. purchase as an either/or, and I don't understand why. If just 5 percent of current iTunes music downloaders switch to a subscription service and like it, that tens of thousands happy iTunes users. That's a good thing, right?

[JeffDM]

Originally Posted by melgross

I see nothing wrong with subscriptions per se. But most people simply don't listen to different songs all the time. They want to listen to specific ones.

Are you sure that that habit isn't just because they only have a limited amount of music? Wouldn't that habit change if the selection they can listen to is practically unlimited? I don't think that buyers are necessarily static, they might change their habits if what is available changes. For example, how people listen to music and sometimes even how much they listened often changed when music file players came about.

[melgross]

Originally Posted by richieg261

Napster-to-go is $14.99 per month. That is equivalent of 15 normal itunes downloads. If you download less than 15 tracks per month from iTunes, then it is more expensive, if you download more, then it is not. The long term cost argument is a myth if you look at it from the perspective "how much do I actually spend on music a month?". For most people who like music but do not download illegally, it is probably more than $14.99

I buy what I want to listen to. If I'm not really interested, then I don't buy it. You can hear most stuff over the radio, either broadcast or internet.

[richieg261]

Originally Posted by melgross

I buy what I want to listen to. If I'm not really interested, then I don't buy it.

I don't understand this argument; are there people out there who will actively go and buy something that they are not interested in?

[melgross]

Originally Posted by JeffDM

Are you sure that that habit isn't just because they only have a limited amount of music? Wouldn't that habit change if the selection they can listen to is practically unlimited? I don't think that buyers are necessarily static, they might change their habits if what is available changes. For example, how people listen to music and sometimes even how much they listened often changed when music file players came about.

I can't speak for everyone, but over the years one accumulates a lot of music.

Most music offered on any music site will be noise to most people. It's only a very small percentage of it that will be of interest.

I buy about 50 CD's a year. even if subscriptions offered equal quality (which is why I haven't bought anything from iTunes either), I don't know if it would be worth the bother.

It's also the problem of what happens if you stop subscribing. That must be an important consideration. I assume that people want to listen to music their entire lives. so, if you leave a service after five years, after spending $600 or more, you come away with nothing.

Yes, it's true that if you then subscribe to another service, ypu can get most of the same songs again. But what if you don't want to subscribe again? The money is gone. What if you want to play the songs over a different system? They often offer limited options for that.

[JeffDM]

Originally Posted by melgross

I buy what I want to listen to. If I'm not really interested, then I don't buy it. You can hear most stuff over the radio, either broadcast or internet.

Both forms of radio are incredibly limited, I really don't think that's a good indicator of what's available.

[melgross]

Originally Posted by richieg261

I don't understand this argument; are there people out there who will actively go and buy something that they are not interested in?

It's pretty simple. That's what you are doing with when you have a subscription. You are paying for all of the songs you don't listen to. and the ones that you do listen to go by by if you stop paying.

The point is that all of the songs on these services hold no interest for most people, only a very small subset does. I buy that subset. I'm not interested in the rest.

[richieg261]

Originally Posted by melgross

It's pretty simple. That's what you are doing with when you have a subscription. You are paying for all of the songs you don't listen to. and the ones that you do listen to go by by if you stop paying.

The point is that all of the songs on these services hold no interest for most people, only a very small subset does. I buy that subset. I'm not interested in the rest.

But is the subset more than $15 per month to you? If it is then a subscription is a good alternative. What can you actually "buy" for $15?

Problem is, I have used both forms, and realised that for heavy users, a subscription gives the consumer maximum choice. iTMS would be probably 100x more expensive than that of Napster if I used it to purchase the music.

Get every album of every artist you like. Whack WMP on random. Listen to all the music you like, each day every day.

Someone tells you to listen to a new band, straight on Napster, listen to the music, download if you like it for no extra cost.

I feel like a winner. :P

[melgross]

Originally Posted by JeffDM

Both forms of radio are incredibly limited, I really don't think that's a good indicator of what's available.

Not really. But the subscription services don't offer nearly the breath of selections that itunes does, which is now over 5 million songs. Most services offer about 2 million, though one here and there might offer more.

And lest you think that enough, remember all of the times people complain about not being able to find something they want on itunes. Think about how bad that must be on a subscription site where there may be half the number of songs.

[melgross]

Originally Posted by richieg261

But is the subset more than $15 per month to you? If it is then a subscription is a good alternative. What can you actually "buy" for $15?

No, it's not. The quality is not good enough. I don't particularly care that some people think it's wonderful, it's not, so it's of little value to me. The restrictions on what devices can play the music is more limited than iTune is.

Overall, the bother isn't worth it to me.

If you love it, that's fine, your needs are different.

I don't care about the $15 a month, but some might, if they decide to leave subscriptions completely.

[JeffDM]

Originally Posted by melgross

Not really. But the subscription services don't offer nearly the breath of selections that itunes does, which is now over 5 million songs. Most services offer about 2 million, though one here and there might offer more.

And lest you think that enough, remember all of the times people complain about not being able to find something they want on itunes. Think about how bad that must be on a subscription site where there may be half the number of songs.

True. Two million or five million is still about 2-5 million more than most people can listen to, and seemingly 2-5 million more than most radio stations play. Radio plays such a tiny subset that it's not funny, and I don't think it's a decent sampling either.

[richieg261]

Originally Posted by melgross

No, it's not. The quality is not good enough.

I reckon that if someone gave you an "Audio CD" (which cosmetically looks identical to a retail CD), which has had the original PCM audio compressed down to 192kb/s AAC and then converted back to PCM for playback, you would not have the faintest until someone told you.

Anyway, getting off topic. I just hope Steve backs down on this, so I can move back to the iPod fold.

[melgross]

Originally Posted by richieg261

But is the subset more than $15 per month to you? If it is then a subscription is a good alternative. What can you actually "buy" for $15?

Problem is, I have used both forms, and realised that for heavy users, a subscription gives the consumer maximum choice. iTMS would be probably 100x more expensive than that of Napster if I used it to purchase the music.

Get every album of every artist you like. Whack WMP on random. Listen to all the music you like, each day every day.

Someone tells you to listen to a new band, straight on Napster, listen to the music, download if you like it for no extra cost.

I feel like a winner. :P

For many of us, it's not the $15 a month. I spend a lot more than that per month.

It's the perceived value. I don't find a subscription to be worth the $15 per month, but I do find the $60 per month I spend on Cd's to be a good value.

My primary way of listening to music is not through a cheap pair of headphones, so no downloaded music is of value to me. I'm not the only one.

[melgross]

Originally Posted by JeffDM

True. Two million or five million is still about 2-5 million more than most people can listen to, and seemingly 2-5 million more than most radio stations play. Radio plays such a tiny subset that it's not funny, and I don't think it's a decent sampling either.

Except that people only consider that number when signing up. They only listen to a few thousand of those songs at best.

If you don't listen to Rap, or Blues, or folk, or classical, or country, or jazz, or...well, you get it.

Even if you listen to rock, you might not listen to the music of the '50's, or '60's, or '70's...again, you get it.

Yes, when people first sign up, they listen to stuff they don't normally listen to because they...can!

It's a big thrill, and exciting, until it becomes boring, and people release they are listening to stuff they don't really like.

That's why there is such a high turnover in the subscription industry, why so many people leave after just a few months. They soon realise that most of the music doesn't interest them, and they listen to less, finally deciding they don't want to continue paying.

I think that Jobs is correct. People want to feel as though they have control over their purchases, even if it costs more.

[JeffDM]

Originally Posted by melgross

Except that people only consider that number when signing up. They only listen to a few thousand of those songs at best.

If you don't listen to Rap, or Blues, or folk, or classical, or country, or jazz, or...well, you get it.

Even if you listen to rock, you might not listen to the music of the '50's, or '60's, or '70's...again, you get it.

Yes, when people first sign up, they listen to stuff they don't normally listen to because they...can!

It's a big thrill, and exciting, until it becomes boring, and people release they are listening to stuff they don't really like.

That's why there is such a high turnover in the subscription industry, why so many people leave after just a few months. They soon realise that most of the music doesn't interest them, and they listen to less, finally deciding they don't want to continue paying.

I think that Jobs is correct. People want to feel as though they have control over their purchases, even if it costs more.

I can understand that. I would like to have the service available to me, even if I would only use it for a few months. I don't know how else I can get a fair sampling of what exists to know whether or not I would like something. I don't listen to radio, not only is it nasty with respect to ad overloading, the rotation pool of a given station is way too shallow. I don't think even a tiny fraction of my music was ever put on the radio.

[TBaggins]

Originally Posted by Porchland

But wouldn't you like to have the choice [of buying songs AND/OR subscription]?

People seem to be viewing music rental vs. purchase as an either/or, and I don't understand why. If just 5 percent of current iTunes music downloaders switch to a subscription service and like it, that tens of thousands happy iTunes users. That's a good thing, right?

BINGO! You hit the nail on the head!

It's amazing how many people, if you simply whisper the word "subscription", freak out. They always assume that if Apple does subs, buying your music will go away as an option. That does NOT seem to be the case, as Apple would implement it, but ppl leap to that conclusion anyway.

Look at my post... I took pains to say that Apple should offer subs ALONGSIDE their traditional 'buy the track' model, and the person replying to me still reacted like it was an 'either/or' proposition. People need to chill... adding subscription to the iTS would be a choice ENABLER, not a choice destroyer.

.

[melgross]

Originally Posted by JeffDM

I can understand that. I would like to have the service available to me, even if I would only use it for a few months. I don't know how else I can get a fair sampling of what exists to know whether or not I would like something. I don't listen to radio, not only is it nasty with respect to ad overloading, the rotation pool of a given station is way too shallow. I don't think even a tiny fraction of my music was ever put on the radio.

It's why I have nothing against the idea. I just don't find it to be useful.

most internet radio stations have much more music, and either no ads, or fewer.

But, most people listen to the top 40, and except for an occasional move beyond it, are happy with it.

I would love to see the entire purchasing history of iTunes. Just how many of each song has been sold, not to each customer, though that would be interesting as well, but for the site itself, and when it first appeared on iTunes. That would give us a good idea of what many people actually care about.

The same thing for subscriptions. What are people actually listening to?

[TBaggins]

Originally Posted by melgross

But, most people listen to the top 40, and except for an occasional move beyond it, are happy with it.

The top 40 is the Top 40 for a reason Mel, I'll grant you that.

But, by the same token, there are plenty of people who'd rather be taken out back and shot than be forced to listen to nothing but top 40. Listen to one of the big, soulless pop FM radio stations for several hours in a row to get the full effect... it is painful.

Some don't seem to have even 40 songs in their rotations... i.e. you can set your watch according to what song is playing.

.

[JeffDM]

Originally Posted by TBaggins

The top 40 is the Top 40 for a reason Mel, I'll grant you that.

You mean like payola?