Version: 2008

Comments on: Why Microsoft, labels cling to music subscriptions

Universal Music exec says that recording companies can't survive exclusively on sales of digital downloads. This apparently is one reason why music sector won't give up on subscriptions.

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by skeptic47 February 6, 2009 9:40 AM PST
You have to try it, after awhile the "ownership" thing is outweighed by access and convenience.

I've been a Napster to Go subscriber for some time, and it really allows you to expand your horizons. When there's no cost involved in downloading, if I hear and like a song by an artist I don't know, I'll download 20 or 30 songs by that artist, keep the ones I like and delete those I don't. Sometimes I'll get nostalgic for some god-awful song I liked as a teenager, I'll download it, listen a few times, then delete it before someone actually sees it's on my player. I download comedy routines for plane trips and delete them after I've listened to them. The site makes it easy to discover new artists. It would be brutally expensive to do this through a paid download service. Of course, with just a bit more hassle, I could do this illegally, so if you prefer infringing then I could see how you'd have an issue with subscriptions, but if you want access to all the music and entertainment you can handle at a very low per-unit price, subscriptions are the way to go.

My only concern is that I can do the math and I know that these artists are not getting much money from my downloads. That bothers me.
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by Draxon February 6, 2009 9:46 AM PST
You all keep talking about keeping the 10 songs a month but what you all fail to mention is that those 10 songs you get to keep are almost always WMA files and wrapped in terrible DRM,
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by rapier1 February 6, 2009 12:42 PM PST
Not necessarily. You also have the option of downloading the MP3s if they are available.
by fazalmajid February 6, 2009 9:48 AM PST
This columnist was mentioning a Steve Jobs interview to Rolling Stone magazine a few days ago. In that interview, Steve Jobs correctly predicted the failure of subscription models. What's more interesting, he was describing the wishful thinking at the labels, who thought they could have a lucrative subscription business as with AOL. I guess AOL is not such a poster child anymore...

"That's the business we want", they'd say. Well, no, you can't have a pony. Tough.
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by joerickx February 6, 2009 11:10 AM PST
Why is I that back in the days of vinyl media the record companies made money hand over fist selling singles and albums, but with digital media, where they have no manufacturing costs and a unit distribution cost of nearly zero, they can?t make any money selling singles and albums on a unit basis?
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by mgrooves February 6, 2009 11:11 AM PST
greg -- i'm not sure if you or your editors are responsible for the headline, but it's pretty ridiculous. and i don't mean ridiculous good.

the labels are "clinging" to subscriptions because they're trying to make money (for them and for their artists), and subscriptions represent another form of digital revenue -- just like ringtones, just like ad-supported music from my company, imeem.

you make it sound like a bad thing that in the transition to digital, people are trying to make money from something other than iTunes download revenue. in fact, it would be irresponsible of them not to try to make money from subscriptions, and i suspect you and other people would knock them for leaving money on the table if they decided to drop support for subscriptions. you can't have your cake and eat it too.
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by sandonet February 6, 2009 7:53 PM PST
Hi MGrooves,

I have nothing against the labels' attempts to make money. I used the word "clinging" to call attention to their insistence on pursuing subscriptions after trying to make the model work for so long and failing. Maybe they'll be rewarded for their persistence, but I don't see any reason to be encouraged.
by sirtwist February 6, 2009 12:22 PM PST
I'm a Zune Pass subscribe and I love it. I'll put it pretty simply: I have about $4000 worth of music in terms of 99 cent downloads (i.e. about 4000 songs). I've had the Zune Pass for about 2 years. I've paid roughly $360.

I can easily justify the $15 a month expense, even without the new keep 10 songs per month perk. When I was using an iPod with iTunes, I was buying, on average, 2 albums a month. That's $20 per month for 20-30 songs (depending on how many songs were included on the album). For $15 per month, I can download however many albums/songs I want.

It's not for everyone. If you only buy an album every couple of months, it's probably not worth it. But for me, who was consistently buying 2 or more albums per month, the cost savings are immense. And if I was going to spend that $20 or more per month anyway, why not get access to a larger collection of music for less money?
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by unknown unknown February 6, 2009 12:27 PM PST
If they think I am going to pay extra on my internet service to subsidize their failing business model and brain dead executives they have another thing coming.

Music and movies are things I can easily do without, and considering the junk they turn out I often choose to go without.
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by SmoothIAm February 6, 2009 12:30 PM PST
Think the a better model for subscription services is let people pick a certain number of tracks they will own forever. So you pay $15 a month for unlimited access to their library but you get to pick 10 songs a month you own forever. So if I pay for a subscription services for a year. I get to own 120 songs forever and have access to the unlimited songs for that year.
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by dajunga February 6, 2009 1:20 PM PST
Many posts above seem to describe Zune in this way.. you should check it out.
by plbyrd February 6, 2009 12:51 PM PST
The reason subscriptions have not caught on with music buyers is that the dominant hardware platform refuses to even give it a try. Steve Jobs loves the fact that people with higher-than-normal incomes don't mind spending hundreds of dollars per month downloading song after song after song that they may only listen to half a dozen times. These are the same fools who pay mega-premiums for the iPod Touch and iPhone. The majority of iPod owners I know hate the fact that they can only buy musting on iTunes and that it's less than convenient to source music elsewhere and use it with iTunes.

What you are seeing is the chilling effect that Apple's monopoly is having on the entire music industry.
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by smileyfreak1981 February 6, 2009 2:31 PM PST
o_rly?

I own an iPod, and I can download stuff from e-Music and AmazonMP3, and load it into iTunes and onto my iPod just fine. In fact, I rarely buy anything from the iTunes store.

I believe this makes your point null and void.
by rapier1 February 6, 2009 5:54 PM PST
Yes it make his point completely null and void because your individual experience is, without a doubt, representative of everyone. Tell us more personal anecdotes so we can learn how the world really works.
by plbyrd February 6, 2009 8:15 PM PST
@smiley and rapier

Try placing any music you have subscribed to on an iPod or iPhone. You have completely missed the point of my post which is that Steve Jobs is single-handedly killing the subscription business with his monopoly on the player market.
by rapier1 February 7, 2009 7:28 AM PST
@plbryd:

You might not have noticed but I was weighing in on your side.
by plbyrd February 15, 2009 10:47 AM PST
@rapier1

Sorry, didn't catch the sarcasm the first time around.
by dajunga February 6, 2009 1:17 PM PST
Finally some sensible minds! :) Subscription music that you can take with you on a portable device is brilliant! I have been a Rhapsody user for about 5 years now - on my iBiza Rhapsody player I have over 7200 tracks of music hand picked over the all those years that I can access at the push of a button. Total cost for me to have access too all these tracks and MILLIONS more over those years? $779.40 at $12.99/month. Now if I had to buy them.. well that would have cost me about $7200 bucks.. Now that is ridiculous..

If I lose my player.. no problem it's in the "cloud" - I can get to my music from anywhere at anytime. If I stop paying my $12.99/month for my service I will lose access to the music - but when I come to my senses and start paying again after realizing how dumb it was to stop - I won't skip a beat.. all my music is there waiting for me like millions of loyal dogs with their unconditional love ;-)
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by oldguytoo February 6, 2009 1:54 PM PST
Physical sales cannot be substituted for with downloads. Many people still desire the shopping experience. One of the many mistakes labels made was doing away with singles, forcing consumers to buy full length CDs. Then they made the mistake of releasing CDs that had only one or two quality songs, and that was just a rip-off for consumers and music lovers.

Downloads and subscriptions are ok, but the labels shouldn't rely on them to hang their hat adn make most of their profits - there is no substitute for physical goods. Just make them quality physical goods, begin distributing singles again, and you will see the industry begin to turn around again.
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by smileyfreak1981 February 6, 2009 2:56 PM PST
What's with all the Zune fanboiz and fangurlz posting on this article? Do you guys get paid per post? Seems kind of spammy, just saying...
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by dajunga February 6, 2009 3:14 PM PST
Hold up! I'm a Rhapsody fanboi - represent! just saying... ;)
by rapier1 February 6, 2009 5:55 PM PST
Paid no. People who actually like a product and are willing to be vocal about it? Sure. Sounds oddly like how Apple users used to be.
by plbyrd February 6, 2009 8:16 PM PST
Could you imagine paying your cable company for every individual TV show you watch?
by Understarsidream February 6, 2009 5:44 PM PST
I don't understand his point - digital downloads aren't enough to keep the music industry afloat? I want to know why since the cost of "manufacturing" a download vs. CD is next to nothing.

Where is all the money they're saving from not having to pay CD manufacturers going?
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by ofmyony February 6, 2009 6:15 PM PST
They have to let consumers keep the music they collect through subscription. It is the only business model that will work.

The thing that keeps consumers subscribing is value and quality new music or a rotating selection of songs every month to keep consumers adding music to their collection, therefore keeping the revenue coming in. I restate that consumers must be allowed to keep the music they collect or a subscription based model will not work for very long.

Movies are different because people only watch movies a few times at best and seldom collect huge libraries like they do songs. People want to own their music that is it.
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by opiapr February 6, 2009 6:46 PM PST
I use netflix works great but the idea of subscribing to music is plain dumb. like other here had said people listen to songs they like over and over again and in many different ways. For example I hear a song I like on the radio I immediately download it to my g1 via amazon when I get home I transfer my purchased song to my computer. Sometimes I buy a bunch and make a cd to put on my car. Because I already paid for that song I can but I know the dubious content-creator 2008 guy here that smells like RIAA mafia guy will find a way to claim that stealing like they always do because they what you to be paying for the same songs over and over again.
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by Beaupedia February 6, 2009 8:13 PM PST
I love my subscription music! I have 30 gigs of music, only about 5 gigs do I own. I could never listen to this much music otherwise. It's fantastic.
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by sebastien.kalonji February 6, 2009 11:35 PM PST
@ superonline : Radio doesn't play what i want to hear. The might play a few songs I want to hear, but I have no need to listen to all the ******** they play as well. My iPhone is my radio and i'm the deejay on that station!
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by Fil0403 February 7, 2009 6:51 AM PST
@ sebastien.kalonji: What kind of deejay has to go to buy special headphones to fit in the headphone jack?
by Fil0403 February 7, 2009 7:01 AM PST
"This is also the device that saw a 54 percent decline in sales for the fourth quarter of 2008."

This is also the device that reached 3rd spot in worldwide sales in less than 5 years.

P.S. Before you fanboys start whining, I own a 160 GB video iPod myself and I wouldn't switch it for any other MP3 player (Zune included).
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by parmy22 February 8, 2009 10:53 AM PST
Pure sub services only make sense for people whose ears are bigger than their wallets. I enjoy my Rhapsody subscription quite a bit. I've tried unsubbing, and I just ended up spending a year's subscription fees' worth of lossless downloads/cds/vinyl in a month. I've tried last.fm but it is very unfriendly toward music that is not pop/rock. I also love emusic & think their model is better, but that's a slightly different story (they don't have any major label stuff).

But the majority of consumers listen to few genres & don't have any interest in exploring - why would they want to spend $13/month to check out a couple of albums?

The big labels aren't going to change people's listening habits until they stop selling crap & start selling quality & variety. Selling an overpriced cd by having 1-2 singles air on the radio every half hour doesn't cut it anymore. These days people just don't want to risk $ on music they haven't heard, since history has shown that it is most likely to be redundant filler.
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by jon654321 February 8, 2009 8:30 PM PST
The recording industry "as we currently know it" may not survive. But the world will go on - music will thrive. There is nothing more satisfying than to see a Cartel crumble.
Cartel - definition = an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.
Subscriptions will ultimately fail - it would be brilliant if it wasn't so counter to what music is all about.
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