Apple's Jobs still not keen on iTunes subscription service
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."
"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."
Comments
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.
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.
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 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.
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
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.
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.
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.
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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.
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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....
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."
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.
... 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.
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?
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.
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!
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.
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
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