iTunes Subscription Model in The Works? Savant Weighs In.

aSavant — Wed, 19 Mar 2008 18:36:31 +0000

The Financial Times reports today that Apple is “in discussions with the big music companies about a radical new business model that would give customers free access to its entire iTunes music library…” This is sort of exciting and an about-face from Mr. Jobs’ feelings that people “want to own their music.”

We believe that people do want to own their music, but if you truly want to rule the music mind share, you need a subscription service to gain users who want choice. iTunes subscriptions seems like a natural extension of what is already available. We can imagine the ability to select a group of songs, or even a random smart playlist, that can be loaded into an iPod device. Then you could discover your music while out and about, perhaps having some mechanism to earmark it for purchase when you re-dock. After all, some of us do want to own our music, but we like the subscription model to discover new music. Having that capability would be an exciting addition to the iTunes feature set.

As loyal followers of King Jobs, we agreed that owning music is better than renting. However, after messing around with Rhapsody and Napster (the latter on Windows only), we see the benefits of a subscription service as a way to discover music. Although we’ve enjoyed the subscription aspects of these networks, the book of music feels somewhat limited. Because these systems are Web-based, there’s usability issues inherent with using a browser, which would not affect the iTunes’ application-based service. Features such as playing music behind other applications, really flexible search tools and easy playlists would certainly benefit an iTunes subscription user. If Apple’s pricing stays inline with existing subscription services, we could probably expect a $9 to $12 per month price point. Perhaps they’d offer special packages at a discount?

The music labels are rumored at being upset with Apple’s market share and the associated power it wields. If these rumors are true, Apple may have quite a hurdle negotiating with the record companies to make subscriptions happen. However, the labels certainly benefit from the music discovery associated with freely listening to music on-demand–something they seem to have forgotten with their current business model of suing clients into buying music. Music discovery was previously the dominion of radio stations and a large-library subscription music service from Apple would certainly affect radio stations’ listenership. Record companies must recognize the benefits as music discovery continues to shift online. With higher-quality audio and fewer disruptive ads, users can be quickly converted to buyers while discovering ads online–something radio stations certainly cannot compete with. From a business standpoint, the labels would be wise to embrace subscription services for these reasons and detailed customer analytics, not available from the airwaves. We here at AppleSavant.com would certainly applaud Apple’s embracement of a subscription service.

An Apple-designed subscription service is certainly something we’ve been dreaming about for many moons.
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iTunes Subscription Model in The Works? Savant Weighs In.