Could an iTunes subscription service save the record biz?

The record industry better hope that Wednesday's Apple announcement is big news--pre-cut ringtones, a new digital album format, perhaps the addition of recordings from some obscure 1960s rock band who were apparently pretty good. According to an analysis in today's Billboard Online, the usual summer slump in digital download sales is more pronounced this year, and ringtone sales continue their steep decline. For an industry that's counting on digital to make up for declines in CD sales, that's very unwelcome news.

What if Apple brings Genius to the cloud? It might prove that subscription services have a chance after all.

The author, Glenn Peoples, suggests that ringtones and a new album format on iTunes could help, but there's another possibility that I haven't seen mentioned elsewhere: what if Apple takes the plunge into subscription-based music? So far, subscriptions haven't been a successful business model, but I'm not convinced it's because the idea is flawed. The problem is that no subscription service has been available for the iPod or iPhone. (Spotify for iTunes is too new, and not available in the U.S., so I don't count it yet.) Look at Pandora for iPhone: it doesn't even let you choose individual songs, but once users realize that they have on-demand access to an infinite library of music, they can't seem to stop raving about it.

Imagine if Apple combined a new subscription service with the iTunes Genius function, which is conceptually similar to Pandora but currently limited to your existing music collection. (It also recommends songs in the iTunes store, but you have to buy them individually, which kind of ruins the delightful-surprise factor.) How much would you pay for that? Now multiply that by some percentage--20 percent might be reasonable--of present and future iPhone and iPod Touch users, and suddenly you're talking about meaningful annual revenue. I know that Steve Jobs has insisted that customers want to own rather than rent music, but remember that he once scorned the idea of a video iPod as well.

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[Pete Bardo]

Jees, Matt, don't give them any ideas!

[Charswebbe]

Subscription is the only way to go! All my family have Zunes and two of have subscription services so for $30 a month 6 of us can download all the music we want. We can have up to 3 computers and 3 Zunes on each subscription and they do not need to be in the same home.
After storing hundreds of LP's, Cassettes, and CD's for the last 40 years I have found very few of them I listen to today. In my opinion, Subscription is a heck of lot cheaper than buying all that music and than not listening to it in a couple years.

[sebastien.kalonji]

Wait till Microsoft decides the Zunes lacks behind in sales and drop the Zune and it support like they did whit "play for sure" in the past.

[La_Mont]

I will not be paying for any music subscription service. They will probably never let you move the music you paid for around as you like. As in to your new computers and mp3 players and whatever else technology brings about, as often as you like.

[protagonistic]

I think most people would disagree with you. I will never subscribe to a service that does not give me control over my music. I still listen to music I bought in the 60's and will probably do so for the rest of my life. Also, I prefer to get my music as wav quality music as opposed to the formats they stream on these services.

[sebastien.kalonji]

iTunes already saved the music industry by doing the opposite of what others where into, subscriptions. Why do people still want to shove those subscriptions down our throat. We didn't want them when iTunes was not around and we don't want it now.

[solitare_pax]

Agreed - if the music industry wants to save itself, it ought to cut the big bucks the record execs spend on themselves, and their legions of lawyers who are out hounding kids who dare to share music like it's free or something.

[cpopken]

They could just offer the consumer a choice, nothing wrong with that. I would bet quite a few people would sign up if Apple offered it.

[sodapop2k9]

This dumb. How about if Apple licensed it's OS yada yada. The music industry is stagnating because or the recession. The music industry is stagnating because they gutted and polluted commercial radio. They even screwed up MTV by not playing music anymore. The music industry is stagnating because they can only promote a couple dozen artists at a time. Rather than talented decade spanning artists they have flash in the pan artists. The music industry is stagnating because they want to sell you the same song over and over. THe music industry is stagnating because they want to increase prices.

The basic problem with subscriptions is that they often limit choice and limit usability. Plus the music industry would screw up the subscription by renting you the song.

[ddhboy]

No, I wouldn't buy it. Why? Because most of my music are from indies and they wouldn't be part of this thing, it would be the big names that aren't suffering, but like to complain about piracy while driving up prices to the paying consumer. Even if my indie records entered the service it wouldn't be of any value to me, because your essentially paying unlimited money to keep access to the music you downloaded.

If the music industry should follow anyone's lead, it should be the small Ghostly Records, who have put out an app on the app store called Ghostly Discovery, where they offer a great number of their songs for free unlimited streaming, knowing that the app is a tool for gaining customers rather than the RIAA's stance that streaming services like Last.FM and Pandora are alternatives to customers buying songs, which isn't true at all.

[Michichael]

god I hope not. Let the industry die. I'm sick of hearing about legislation being pushed that would strip away my privileges and rights because the industry doesn't know how to survive in this market. I'm not even one of their customers! >.<

Dude it's called Zune music service. 15 dollars a month, all the music you want. that's revenue.

[protagonistic]

And plenty of suckers to take them up on it.

[ClarkWells]

@protagonistic

You sir, are an idiot. Zune gives you the option. Buy the song (plus they give you 10 free buys a month, which on itunes would cost 10$) so the way i see it, i pay 5 dollars a month, to stream unlimited amounts of music, and download them as subscriptions tracks if i wish. I have a zune player, so i am able to take any of those songs with me anywhere.

What doesn't make sense about a subscription service? Works great for me.

Next time you buy a song on iTunes, just think about the fact that i am paying one flat rate to get any song that i want.

[tektaktyks]

i say lets kill the industry and buy music straight from the artist,not craptunes

[Perry_Clease]

Go ahead and do that.

[tektaktyks]

go ahead and keep trolling

[Perry_Clease]

"go ahead and keep trolling"

I am not trolling kid, that is what "u" do.

[tektaktyks]

no thats what u do kid.

[EvanSei]

If apple goes subscription I will be taking my business else ware I personally don't like prescription music services and pirating is not an option for me (it is illegal)

[Groucho6]

Renting music is nothing more than Pay-Radio. Personally, I'm not interested. Nor am I interested in having my music on a "cloud". I'll keep what I buy in my own possession on my own systems, thanks.

[ofmyony]

10 dollars per month for a rotating catalog (all you can download) where you can keep the music. No DRM is a must. In a 12 month period you will have the full catalog open to you.

This is a unique plan and one that would keep consumers subscribed. New music will be the key to keeping users subscribed after the initial 12 month rotation. Along with the possibility to catch up on any missed archive titles from the previous 12 month song rotation.

This is a model I would support and subscribe. Subscription plans that do not allow a user to keep their music will not be successful to the mainstream. DRM is another problem, users want to be able play their music on any device they want. I think iTunes AAC unprotected file format is not the best answer to DRM I do think it could be successful. MP3 is the obvious choice.

I would like to see Apple introduce a new subscription based service. I just wonder how consumer friendly it would be.

[CDubber]

I prefer Slacker Radio. 1) it's free, and 2) it plays songs for me, either by my preference or via a selection of pre-programmed channels. Having to endlessly download tunes manually with a subscription service sounds like a pain in the butt.

[unidentified504]

I love itunes software and my iPhone, but haven't really found a use for the itunes store. I'm one of those people who still like to go to the store and buy a CD I like. I love hard copies. I would download more movies if they had the same special features as DVDs/Blu-Rays.

[Thomas, David]

Ummm. No

[6stringluke]

You can dress up a pig and market it as much as you want to but the only thing that will drive up record sales, is a high quality product. We are back in the 80s in terms of music. One hit wonders abound, and music is more about business now than its ever been. Record companies are so afraid of losing money that they sign up trendy bands who, by the time their record is released, the world has moved on to something else.

This is all cyclic. We as a society are coming to terms with how music is being offered. I for one would never pay for a subscription, because I already have 30 gigs of music on my hard drive that I have either bought off Itunes or transfered from my CD library. The next decade will see us coming to terms with the market and hopefully, with services like Itunes and even the artists' own websites which make music available so easily, will encourage people to step outside of their pop radio stations and explore what's out there.

[myrules92]

If iTunes goes subscription, consider me an illegal music downloader. I REFUSE to subscribe for music unless that music is unprotected, which is never going to happen.

[oirudleahcim]

Part of the problem, never mentioned, is that there is so much music out there these days that it is only possible to listen to a finite amount of it. Dismiss all the derivative, self-referential commercial pop, the unpolished indie material mostly desireable to a small number of fans, the classical repertoire that's been played to death. THEN, maybe there's something left that's actually saleable quality. It's starting to seem like the music industry *must* *sell* *more* *and* *more* just to survive. And maybe there should have been a compressed download format that offered regular audio quality instead of turning good music into unlistenable junk.

[jgoney]

"And maybe there should have been a compressed download format that offered regular audio quality instead of turning good music into unlistenable junk."

Yeah, I'm sure no one's ever thought of that, thanks.

[Stopper90004]

Our family has been using Rhapsody ($15 a month / 5 million songs / unlimited downloads on three PCs and 3 MP3 players) for several years... my daughter downloads dozens of new albums each month; I listen to old 60ies through 90ies albums EVERY DAY... we save HUNDREDS of dollars a month while you suckers keep buying music you won't be listening to in six months time for a $1 a pop... you are Steve Jobs pillow-biting Hershey Highways. He OWNS you!

[ckh1272]

@Stopper90004--But we own the song DRM free now, so your point is a little diluted. Like others have said, the biggest problem with subscription is the fact if the company fold, what happens to the music. Refer to the Wal-Mart and Plays for sure fiasco. Enough said.

[6stringluke]

You prefer to rent, I prefer to own....

[bluekatana18]

@Stopper90004--I have to agree with you. I've been a Napster Subscriber for a couple of years now. I'm out, what, $360 dollars, and I've probably downloaded thousands of dollars worth of music. Like it or not, there is a niche out there for subscription. There are those of us who like rotating our music. I'd say that only about 1 to 2 percent of the music out there is actually worth owning, but I need time to really listen to it to figure out whether I actually want to shell out the dough for the rights. And while I'm on the subject of rights, never forget that even though you buy the music from iTunes, you will never actually own it. It's still technically illegal to copy that music for any use but your own (none for your friends, family, girlfriend, boyfriend, etc.). I say bring on the subscription, iTunes, and let's see how it works.

[kelmon]

I have nothing against Apple introducing a subscription service but I will not be interested in it myself. I have no interest in "renting" my music collection only to see it disappear when I no longer wish to pay the monthly fee. Rather, I am quite happy buying the occasional track/album when my finances allow it in much the same way as I was quite happy in the past to by compact discs from the local record store.

[difusi]

Oh Boy, Microsoft Fanboys now touting the superior features of Zune marketplace versus iTunes Music Store? Apple w/78%ms and ZuneMS with>1%ms. Now that's what I would call grasping at straws.

Sadly enough, I love Apple products, but think that the vast majority of Apple corporate employees are arrogant, cocky, egoManiacs that should have had their tales kicked on the playground a little more often.

Give it to Apple though, great products, great management of great products. They should send these ******** that work for them back to sensitivity training.