Napster - Music Subsciptions Are Overrated

kevinbr writes "Napster has concluded that PC-based music subscriptions aren't a growth business ... because it's retreating from its core business. 'Six months ago the subscription music service had 830,000 subs, three months ago it had 770,000, and now it has 750,000. The company says that last drop was expected, because kids stop using the service during the summer. But it's not as if those numbers will swell this fall: NAPS projects only a 4% revenue increase for next quarter. So instead of talking up its core subscription business, Napster is now pinning its hopes on the mobile industry. Music on your cellphone may one day be a real business, but hard to see why Napster is going to be the company that will capitalize on it.'"

Comments

I could have told them that years ago

[Apple Acolyte]

Music subscriptions aren't valuable? What a revelation. Gee, do you really want to pay a monthly fee for limited (DRMed) access to music files, access which goes away if you terminate your service. That value proposition is exceedingly poor, unless you take measures to copy the files into non-DRM form.

Re:I could have told them that years ago

[Apple Acolyte]

Uh, no, sorry. You pay for the files you buy from iTMS only once. Yes, the majority of the files have DRM, but it's really light-weight DRM that doesn't get in the way most of the time. Apple even encourages users to backup their purchased files.

Re:I could have told them that years ago

[Rude Turnip]

You might run into a couple of problems:

1. Zune only works with the Zune store.
2. Urge shut down last week, but at least they transferred their users over to Rhapsody.

I was using a Zen with Rhapsody up until a few weeks ago. I sold the Zen and canceled Rhapsody. In the end, I went back to my trust old iPod mini, but for the longest time I was contemplating switching to satellite radio. One thing I didn't like about the subscription service was having to manage the collection in order to keep up an updated playlist. Honestly, it became a chore that made me dislike it over time.

Luckily, I have a local public radio station that carries NPR and another public station that plays a variety of music that I like. Otherwise, I'd switch to Sirius (to get the NPR feed).

Although I've never owned a Zune, I have used the Zune software to stream H.264 videos to my Xbox. It's a similar interface to Windows Media Player, but a little cleaner and easier to use. FWIW, I prefer the Zune media player to Rhapsody.

Re:I could have told them that years ago

[JeTmAn81]

Actually, the value proposition is incredibly high if you're a music lover with eclectic taste. I use the service to listen to probably at least 40 new albums a month, and all it costs is about half the price of a single cd...per month. If I had to buy those albums I'd be spending at least $400 instead of $6. So yeah, the value's definitely there.

Re:I could have told them that years ago

[halcyon1234]

I've been thinking about this lately. A lot of people at work have no problem shelling out $12 a month for a satellite radio. The music and talk selection isn't really any better than what you'd get on AM/FM. What they're paying for is the availability. It's mainly because they travel a lot between FM "zones", and don't like their music interrupted. (And they like the web interface, which they pipe through the office PA). It's pricey (in my books, anyways), but they have no problem with the payments.

But they'd never go with a pay-to-access Napster-esque service.

The cost is about the same. ~$10/month. With both of them, you lose access to the music as soon as you stop playing. Both are DRM'd (poorly and can be analog-hole'd). Both require access to a network, though the S-Radio is easier to connect to in the car. (No reliable metro wifi in Toronto yet).

So why would they pay for one, but never for the other. After talking about it, the reason we all seemed to agree on is the promise of what's offered. The S-Radio people are right up front with it. "Pay us money. We'll pipe you channels of music. If you stop paying, we stop piping. It's a service we're offering. Okay?"

Whereas these music places are a bit shadier with their promise. "Pay use money, and you can download music, as much as you want.". They say it knowing full well that people associate "download music" as "I transfer a file to my computer and it's there forever, and I can play it however much I want". They think of iTunes, which instantly brings up the thought of "pay per song". So Napster et all are effectively trying to trick people into thinking that they're just like iTunes, but you get unlimited music rather than paying per track. They dance around the "lose access" part of the deal. It comes off as very, very scummy and untrustworthy-- and people don't like dealing with companies like that. After all, if they're going to lie right to your face about this (outright or by omission), then what else are they going to lie about? What else can't you trust them with? Are they REALLY unlimited? It's already too good to be true-- and isn't true at that-- so what else is going to screw you out of your cash?

The satellite radio company tell you right up front what you'll get, and they give it to you. They're business is music.

Napster (and other Music Services) tells you a veiled lie, and seems only intent on taking your money. They're business is exploiting people's desire for music. They don't care about the music at all.

THAT'S why they will always, always fail.

Re:I could have told them that years ago

[xENoLocO]

Which is totally different... I can play it at home, in my car, at work.... oh wait. I can only play it on different machines if i'm on the same network, otherwise I have to take it on my ipod... which can only sync with one itunes... despite that I have multiple computers at home and work, each with a copy of itunes that cant play songs I've bought THROUGH ITUNES.

Yeah, totally different.

But, what can I expect from someone with the name "Apple Acolyte". I'm typing this to you from a mac, btw... while wearing my headphones listening to my ipod...

Re:I could have told them that years ago

[Isauq]

The problem with Zune (aside from it's price) is that, like it's older (and nicer-to-use) brother, the Toshiba Gigabeat S (They are, quite literally, the same hardware internally- firmware and DRM are worse in the Zune is all) You can't transfer your music to your player without the software that comes WITH the player (or WMP if you're feeling maschistic- last revision that came over my desk didn't support UMS mode, though I would really hope they had fixed this by now) because neither are actual mp3/vorbic/mpc/wma/flac players- all of your music goes through a process where the tags are stripped, the file is encrypted, and new tags are written in proprietary format (SAT for the Gigabeat series). If you're a linux (or at the time even a Mac user; fixed yet?), you're just out of luck. Forget subscription services, first let's get a decent player out on the market.

Re:I could have told them that years ago

[oberondarksoul]

Why not just authorise your work and home computers? You're allowed five concurrent authorisations. Sure, it's an annoying DRM limitation. But it's fallacious to say you can only play the same song on multiple computers if they're on the same LAN. (Unless I'm missing something)

Re:I could have told them that years ago

[MobileTatsu-NJG]

"Gee, do you really want to pay a monthly fee for limited (DRMed) access to music files, access which goes away if you terminate your service. That value proposition is exceedingly poor, unless you take measures to copy the files into non-DRM form."

That's one way to look at it. I see it a bit differently. I've subscribed to a music service for quite a while now. (Rhapsody, if anybody's curious.) There are a few benefits to it that are worth $10/mo. to me.

1.) I have access to all their music. Often I go find a bunch of new albums to listen to. That means if somebody recommends a song, for example, I'm listening to it like 20 seconds later.

2.) I don't have a big collection of music to take with my everywhere. Lots of people don't mind that, but I do. I have 3 different computers I constantly access. (Home desktop, home laptop, work desktop.) If I switch computers at work, I just reinstall Rhapsody and I'm hearing music again.

3.) Yes, if I terminate the service, I lose the music. On the flip side, there's lots of songs I used to listen to all the time that I don't anymore. This became wasteful, trying to manage all that. Here I just delete it from my list, and if I want it back like a year later, I just go hunt add it again. Before I was a packrat, keeping songs I didn't know if I really wanted to keep anymore. I can go buy them later if I really really want to make a long-term investment. I haven't done that in ages, though. My playlist today is far different than the one I had a year ago.

4.) This was sort of covered in the first point, but I'm always on the prowl to find new music. This service often gets new albums just as they're released. I pop them into my list and explore. I've found a ton of new music this way. One thing I didn't like about my music scouring before is that it was often tied to how much disposable money I had in a given month. I hated buying 3 or 4 albums and only getting a handful of interesting songs. In theory I could hear the clips and decide, but too many times I've not really liked a song until I've heard it a couple of times in its entirety. This makes me squeamish about buying a whole album.

5.) There's lots of stand-up comedy on this service. I use it to enterain myself at work from time to time during long monotonous days.

Subscription's not for everybody, but it's certainly not for nobody. Yeah, you've got a point. For me, the termination of services doesn't multiply the other values of it by 0. To me it's sorta like cable TV for music, only this is on-demand. I certainly like it better than satellite radio or other subscription services just for that reason. Considering all the new music I've found, I'd say there's plenty of value in it for some people, especially those with multiple computers or finicky music tastes.

Re:I could have told them that years ago

[sm62704]

In this case, making backups so you can listen once you terminate your service is really abusing the system

You mean like time shifting a TV show with your VCR is abusing the system, Mr. Clueless Anonymous Record Company Executive? Do you have any idea how many episodes of Star Trek I taped that are on my shelf right now? And how little I care about what a thief and liar like a record or music executive thinks?

Which finger am I holding up right now?

-mcgrew

Re:I could have told them that years ago

[Anonymous Coward]

Oh wait, you don't have to play it on the computers on the same network. You can register up to 5 computers to your iTunes account. The restriction of playback on the same network is only for streaming. Moreover, with iTunes Plus -- DRMless AAC files -- there is no restriction at all.

Gee, what can you expect from someone who called himself Loco. It makes no difference whether you type your post on a Mac and listen to music on iPods. Being a Mac user doesn't change the fact that you are ignorant.

Re:I could have told them that years ago

[toadlife]

Time shifting != archiving

Re:I could have told them that years ago

[ghuytro]

The value proposition when it comes to digital music is not exclusively defined by "owning the music" or music files being "DRM free".

The value propositions of a subscription service are:

1) Having access to a vast catalogue of music
2) All you can download
3) Transportable to my portable media player
4) For a low monthly fee

What does $12.99 get you on itunes in one month? 12-13 songs? Songs that you own? Pfft, I go through that many songs in an hour or two.

I have over 1,000 CD's that I "own" and are "DRM free" yet I barely ever listen to them when I can just fire up Napster on my laptop, search the artist and play the album, or, download them to my MP3 player and play them in the car.

I've traded ownership for convenience and I'd hate to see that choice go away.

Re:I could have told them that years ago

[MobileTatsu-NJG]

"Can you say for certain that Rhapsody is going to be around next year? Or the year following? Say some lawsuit shows up, blows it out of the water and it ceases entirely."

Nope. Either I'll pack up and move to another service, or I'll go find the songs I really want to have and buy them.

"What are you left with? Not a thing. All your money that you spent on music is gone, and you have nothing to show for it."

Though I get what you're saying, that isn't quite true.

- I have found a LOT of music I wouldn't have found otherwise. (I've also found a lot of music I *don't* want or only found entertaining for a bit.)

- I've had the convenience of not having to worry about gigabytes of data or synchronization across multiple machines. This is actually what drove me to subscription in the first place.

- This is similar to my first point, but my music tastes have expanded. I hadn't really given 70's music a chance until it didn't cost me anything to try. I feel silly about that now, I understand why modern is considered crap.

- I've been entertained for many, many hours. I haven't bothered to sit around and do all the math, but I know I'm going through a lot more hours of music in a given month than I am with TV, and at 1/8th the price. I mean, yeah, the service could die, but that won't go back and undo all the entertainment I've had. Movies and TV are already acceptable to me in this regard, why not music?

I've gained quite a bit, I'm just not able to keep the songs.

That's why subscription-based services like Rhapsody and satellite radio don't make much sense to me. I expect they are great for DISCOVERING new music .. but I have plenty of means to discover music already that don't involve paying money. I recently discovered a group called The 69 Eyes because a song was playing on a random MySpace page that I stumbled across. I liked the song, analog-holed it (and the other one that was there), listened to them for a day or so, decided I really liked them, downloaded their album from iTMS, converted the tracks to MP3. Boom. Now I have the music in a non-DRMed format that I am fairly confident I will be able to enjoy in perpituity, whether some company somewhere else goes out of business or not. That's cool. For me, it's a matter of convenience. I do a lot of my music 'shopping' at work while I'm waiting for stuff to load. That 20 second figure I threw out earlier was literal. I have that song on any computer I'm using Rhapsody with. I understand your concerns about the business going tits-up. Heck, it'd suck for me if Rhapsody went down, I don't know if there's a comparable service or not I can switch to. The thing is, though, I've ALWAYS had that problem with whatever music choices I've made. What drove me to Rhapsody in the first place was a hard-drive failure. I lost my collection of MP3s. My laptop had most of them, but I had gotten lazy about synching across the machines, so I had to re-acquire some stuff. The capacity for loss is, at least, more under my control. But it doesn't go away. I'd be a lightning bolt away from loss. So I'd end up spending money on new HD's or writable media, then spending time keeping it all backed up, etc. Yes, I'd survive a company going out of business, but that's not all that enticing. On the flip side, as long as the business is afloat, I could suddenly materialize on the opposite coast of the country and still get at my music.

Okay, I'm rambling a bit. I apologize for that. Music has a different value for me than it does for you. There are songs I like, but I just don't want to go through all that effort any more to try to maintain a collection. (I wouldn't be offended if you called me a 'consumer' as opposed to 'collector'.) It isn't really gaining me much. I gave up the 'keep' part of the music and gained a much bigger and much more convenient library. If the service dies, oh well. It was fun while it lasted and my music tastes are broader.

Who even uses Napster anymore?

[InvisblePinkUnicorn]

Everyone I talk to refers to Napster in the past tense... "back when Napster was around" ... "I used to use Napster all the time", etc. Rather than fight, it gave in. That's why users have moved on.

Re:Who even uses Napster anymore?

[eln]

Napster far overestimated the value of its "brand". The Napster name was tied to the ability to get limitless music for free in a way that had the added bonus of being somewhat illicit (but not with huge monetary consequences that the RIAA has since tried to impose on P2P users in the years since). The Napster name was never, ever tied to the ideas of quality service, quality music, or anything else that would allow it to monetize the brand.

Napster never had a corporate reputation to bank on like they thought they did, they were only a tool to get free stuff. Then, when the music business came knocking, and everyone who used Napster started fighting, Napster itself folded like a cheap suit. They shut down and came back with a boneheaded business model: You can still get (some of) the same music you got for free before, but now it's crippled and you get to pay for it. I don't know anyone who thought even at the time that this would succeed.

Other companies with tighter relationships with the record companies have since come up with far more successful ways to market music online (such as tying the store to a hugely popular MP3 player, for example). I don't understand why Napster is even still in business.

Re:Who even uses Napster anymore?

[illectro]

I don't want to sound like a broken record but... imeem.com has gone one step further than #1 - centralized database *and* centralised data - all the mp3s get uploaded to the site and are instantly accessible to anyone else on imeem. as for whether it's popular, it's top 100 on Alexa but we all know those stats mean nothing.

Re:Who even uses Napster anymore?

[ucblockhead]

The original Napster didn't overestimate the value of its brand. Roxio, which bought the name from the sharing people overestimated the value of the brand. The people called "Napster" now have no relation to the "Napster" that allowed music trading.

Napster is overrated

[suv4x4]

It' not that music subscriptions are overrated, Napster is. They're not in the position to do what they're doing. Subscriptions are worthless if you can't take them with you on the device(s) you use.

Do you know who's in that position. Apple. I bet my money if Apple introduced subscription model that works with iTunes (Win/Mac), iPhone, and iPod, then it'll be largely successful.

Napster just have a somewhat recognizable name and a funny cat logo.

Re:Napster is overrated

[nine-times]

Well the way I see it is this: buying music is good for times when you want to be able to keep the song, but subscriptions are good if you want to be able to listen to a bunch of different stuff that you don't necessarily want to keep. I have had guilty pleasure songs that I want to listen to over and over for 2 weeks, and then I never want to hear it again. Subscriptions would be great for that.

So I feel like the ideal would be some kind of a hybrid service. Like, let's say you pay a nominal fee for a monthly subscription, where you can download songs, listen to them, but if you drop the service, you can't take them with you. But then if you really like an album, you can buy it, the DRM get stripped, and you basically get to re-download it for free for life, even if you drop the subscription.

I might go for something like that. One of the things I don't like about iTunes is that, if the file gets corrupt, they won't just let me re-download it. Yes, it's happened to me. I know you're allowed to request a chance to re-download all of your purchases, but you're basically only allowed to do that once, and I don't want to do it for 2 songs.

But honestly, with me it kind of depends on how the whole thing was framed, and how the prices worked out. I wouldn't want to have to continually spend money just to keep my current music library from going away. On the other hand, I might be willing to spend *a little bit* of money every month in order to be able to get good recommendations and try music out to see if I want to buy it. There's some wiggle-room with me there.

Makes Sense

[kamapuaa]

It makes sense - why pay for music, when it's so easy to download the pirated stuff for free? iTunes has the people who aren't computer savvy, eMusic has people who like non-RIAA music that can't easily be found, Napster didn't really have a niche.

That said, the actual service (and Yahoo! Music, a competitor) is/was really awesome, for who enjoy listening to a huge selection of music - and have an always-on Internet connection - and have their stereos hooked up to a computer. I guess it was a niche, it was just too small of one.

Napster--Very Worth It

[Fierythrasher]

I really hope this doesn't mean Napster (and Yahoo and the like) are taking away the "all you can eat" subscription service.

I am a Napster customer with the all you can eat model and I LOVE IT.

I am sorry, but I do not want to pay $0.99 for a DRMed music file that I can only use on so many systems, etc. This buck-for-a-song model has existed for far too long and I have only bought four songs this way, through iTunes, and all four were immediately burned to CD and ripped back so I could stip off that horrible DRM.

So with the buck-a-song model it made me do something that probably made RIAA very happy--I bought CDs. I'm sorry, but on a CD I get songs for less than a buck each (while there are some I won't like, there will also be gems I may never have heard had I not bought the CD) plus you get cover art, a media that's higher sound quality than a digital downloaded file. It just didn't make sense to me.

Then look at Napster. Suddenly I had a LEGAL world of music open up to me. I was able to explore the libraries of artists who are somewhat less popular. I'd never have spent $12 for their CDs, but a "Download Album" button had me pulling down every song I could find and listening to it.

Moreover, it is VERY easy to strip the DRM from a Napster WMA. I am an iPod user and Napster WMAs won't work with an iPod (though I wish Apple would relent and add that as a firmware/software upgrade to the iPod). So I use FairUse4WM and, bam, now I have MP3s that play on my iPod. I still pay the Napster music subscription every month and if I cancel I will delete all those MP3s. I'm only playing while I'm paying, so I'm playing by their rules.

This model has weened me from buying CDs altogether. I used to have a $200-$300 per month CD habit. I'm not kidding on that, I have over 3000 CDs and just kept buying every month. But with Napster I don't need CDs, I just get what I need from Napster. It's saving me THOUSANDS of dollars every year.

And my wife and I have very different music tastes. She used to not get music she liked becuase she didn't want to spend as much on CDs as I did. Now for one low monthly fee we both have all the music we want.

Sure, sometimes Napster is frustrating. I was looking for some songs on there that were "album only", "purchase only", or not available at all. It's not a silver bullet. But it is DAMN close.

If Napster doesn't see it as a growth business, that's because WMAs aren't a growth format. If you could do a subscription format that worked on iPods natively then you would have a model that would grow with each iPod sold. PlaysForSure??? If you're basing your business model off of Zune sales, well good luck with that!

But anyone who reads /. on a regular basis should know how to strip DRM from any file using free tools. Given that can be done so easily, I really think we should spread the word to our less tech-inclined friends and help these all you can eat services become a "growth model" lest they go away and RIAA can roll in the money of a buck per song again.

Re:Napster--Very Worth It

[WorkerGnome]

So, what you're saying is that Napster is a great deal, as long as you use it in a way that violates the EULA and circumvents the DMCA.
Exactly like the old Napster, except that you're now paying a monthly fee to do so.

Re:Napster--Very Worth It

[CheeseTroll]

"Moreover, it is VERY easy to strip the DRM from a Napster WMA. I am an iPod user and Napster WMAs won't work with an iPod.... So I use FairUse4WM and, bam, now I have MP3s that play on my iPod."
So, you love the service, but really only love how easy it is to get around their limitations?

"I still pay the Napster music subscription every month and if I cancel I will delete all those MP3s."
I'll give you the benefit of the doubt on that, but how many other people honestly keep their legally-purchased mp3's completely separated from their less-than-legal mp3 files, so they can delete them at a moment's notice?

So, I don't doubt that you've made very good use of a subscription model, but I think your example also shows why it doesn't work very well for most people, esp. if they don't have the expertise to work around the DRM, and why it doesn't work very well for the music industry, if most people don't share your scruples about deleting the music after the subscription ends.

What's so wrong with subscription?

[diehard2]

Well, I have a music subscription to Yahoo and am completely addicted to music new and old. I also work at a computer all day where I am always listening to music. I absolutely can't understand why anyone who truly loves music and has eclectic tastes wouldn't do this. For $7 a month, I have access to several million songs of multiple genres. I don't mind paying for nonDRM'd music, but with all of the music I'm listening to on Yahoo, it would cost me about $5000 in downloads. It would take me being a subscription member for 60 years to make buying from itunes a reasonable alternative. Here, I can sample new albums by people I'm interested in and listen to them over and over again. When I get tired of them, I can just delete them. That way they won't go next to Journey in my decaying CD collection. Its unlikely I would have ever been exposed to Nina Simone, Regina Spektor, the Shins, or Wilco if I didn't have an enormous music library to browse. Some people like all you can eat buffets.

Exit strategy?

[JoeCommodore]

Is that rumblings that they plan from exiting the subscriber music business?

I have one friend who really enjoys Napster's subscription service probably have 1000 songs he listens to. If Napster were to shut down the service I think there would be a lot of very unhappy customers.

Big Business

[meehawl]

Gee, do you really want to pay a monthly fee for limited (DRMed) access to music files, access which goes away if you terminate your service.

Yes, you're right. There's no way this could work. I predict that the delivery of media by subscription using satellite (Sirius/XM, Dish, DirectTV), cable (TV, PPV), cell (mobile TV) and fibre (FIOS TV, etc) will remin a tiny and marginal market, doomed to obscurity.

Re:Big Business

[Apple Acolyte]

Yes, you're right. There's no way this could work. I predict that the delivery of media by subscription using satellite (Sirius/XM, Dish, DirectTV), cable (TV, PPV), cell (mobile TV) and fibre (FIOS TV, etc) will remin a tiny and marginal market, doomed to obscurity. I was specifically referring to music subscription services. There is a much more popular alternative to music download subscription services - iTMS - and it succeeds where these services fail. If there were only music subscription services available and no iTMS, they would much more popular. But the fact is people don't like paying monthly fees for services, yet they will if there's a lack of competition in a given market. I'd prefer not to pay any monthly fees for many common consumer items, but I end up paying for some (like WoW and Sirius) because they are valuable to me and I don't have non-subscription alternatives available in those cases.

Re:Big Business

[Dan Ost]

How many people sit down and just listen to music? I do. I consider it a reward for getting things done with time to spare.

Re:Big Business

[Opportunist]

I hope you can see the difference between constantly getting content for your viewing (and recording), and not being able to use those records anymore when you cancel the subscription, yes?

Re:Music subscriptions aren't overtated

[east coast]

They just don't want it to be DRM-ed crap that stops working when you stop paying that fee.

Umm.. that's called buying music.

What an odd post, why focus on DRM?

[SmallFurryCreature]

I am sorry, but I do not want to pay $0.99 for a DRMed music file that I can only use on so many systems, etc.

Three statements in one sentence always leads to problems. The WMA files from Napster, as you later admit yourselve, are DRMed and run on only so many systems. Your claims of the DRM being easy to strip are meaningless, you can do it with equal ease with iTunes music. IF you are willing to violate US law as a US citizen, then both formats can be easily converted to non-drm formats (mp3) that plays on the fast majority of systems.

So we are left with your complaint that music at iTunes costs 0.99 per song.

How does this cost work out in the long run. The iTunes song is yours for "life". If napster closes, there goes your music collection. ALL your downloaded music, GONE. For good.

Ah but your ripped it (and made yourselve a criminal by doing so) although you do claim that if you stop paying the subscription, you will delete those MP3's. Right. Sure, I believe that. There must be an honest person among us. Perhaps you are it.

But what if you don't cancel, but Napster goes out of business. YOU may still be willing to pay, but you can't. Bye bye collection.

As for spreading the good word, IT IS AGAINST US LAW and the RIAA does prosecute people. You may not agree with the law, but civil disobedience sucks when you are the one being made an example off.

I just wish you had left the DRM part out of your argument and concentrated simply on value for money. Is 15 bucks per month enough to rent music (It isn't unlike a library card and I think most of accept that) OR do we pay perhaps more per song but it is our song.

Currently both models suck. 99 cents for a few megabytes of data is idiotic next to the cost of production. Loosing all your songs because a company goes out of business in a format that doesn't work on the majority of players sucks as well.

Frankly the entire industry is screwed up. The music industry has become so obsesses with fat profits, that they are unable to see that by simply lowering the price they can make theft totally undesirable.

Say that for 15 bucks per month you could download ANY music you wanted in the format you desired. WHY BOTHER WITH FILESHARING THEN? Oh sure, there will be small percentage who will do so anyway, but it should be almost trivial to get most of the western world to sign up just by putting ALL music in the system, ALL means ALL, including "bootlegs" classical music and rare recordings.

Are 14 Million People Chomping?

[meehawl]

the fact is people don't like paying monthly fees for services

I am having trouble parsing your words "fail". The vast bulk of the media marketplace in the United States and even the world is based on subscription revenue. Compared with these, Apple's revenue from single-licence sales is a blip. It's big when considered against the declining revenues of the other single-charge retailers who usually package their content onto plastic disks, but it's still a very slow growing market, subject to random, huge discontinuities, and constrained in its scalability. Trace its growth over the past decade relative to the wider media marketplace and it's just a tragic flatline which, controlled for inflation, shows an even more rapid decline.

Even considering just the XM/Siriu marketplace, 14 million people are paying subscriptions. The urge for these two companies to merge comes from their difficulty in servicing the huge debt associated with developing and launching their satellite fleet. Imagine if Apple had had to build out its own fibre net and install metro routers in every market where it wanted to sell itunes? It's unlikely it would have succeeded. In effect, Apple's relatively small dollar volume market has been subsidized by massive externalised investment from telcos, cable companies, and bandwidth wholsesalers, not to mention the monthly access fees consumers pay for internet service. That's why companies like Apple (and Google, Yahoo, ebay etc) want "net neutrality" to continue, because their business models are unfeasible otherwise. Not that I am complaining, I personally have benefitted greatly from the de-facto socialised mandates of net neutrality.

Re:Are 14 Million People Chomping?

[Apple Acolyte]

Once again, when I said "these services fail," I was not writing broadly about all subscription services of every kind; I was referring to music download subscription services like Napster. I thought that was clear. Most of them have failed. And while I agree that satellite radio has to charge a subscription fee both due to the technological and business models involved, satellite radio is in a different position versus music download services. You talk about Apple benefiting from net neutrality, but so do the music subscription download services. They are both types of Internet products, delivered through the same pipes. The fact is, iTMS is the successful one, and to me it comes down to the inherent value proposition it offers over the heavily DRM encumbered, continuous-pay-or-don't-play services.

They already are in Japan

[mattr]

The OP is perhaps mystified because he is expressing an opinion from 2005 as shown here. Clearly mobile is where the money is, as Steve Jobs can tell you. Their English compatibles page is not too exciting but take a look at NTT DoCoMo's lineup (Japanese). DoCoMo sells advanced phones in Japan with Napster built in. Actually, the brand seems on that page to be "Napster x Tower Records" which will make you either gleeful or sick.. like the RIAA is selling Napster or vice versa. Phones providing unlimited songs it seems are made by several manufacturers (list).

There are two more data points to note.

1. The monthly flat fee format is very popular at least in Japan. In particular, ring tones are a big business, but also all kinds of other media like games, weather reports, and what looks compelling to me is NaviTime which tells you the combination of train and other transportation to get you to your destination in the shortest time. Flat fees though are usually I think 300 yen per month though (for a subscription to downloadable Java games from a game manufacturer). Perhaps you can get more money if bundled when you buy the phone.

2. The HSDPA high speed data network rollout is marketed to people as the way to deliver songs to your phone. Personally I wanted to go to the Internet at high speed but it turns out (at least until sometime in the future) that this is only within the carrier's network, perhaps only to registered sites. So a Napster-like unlimited service is very useful for HSDPA rollout especially for carriers (all of them) who just want to stuff things down your throat and could care less about connecting you the rest of the world.

I should note two things: it may be possible to get out of the network but you will go broke, and also the docomo person told me they might come out with a pcmcia card or some such that could do it. Anyway I'm waiting for the model supposed to come out this month or so that can also do roaming (World Wind service) in the U.S. (the last country to be added it seems).

I'm the exception.

[SanityInAnarchy]

As in, I'm one of the few people for which this would be a bad idea, as I basically refuse to buy DRM'd media for my own use. Partly on principle, mostly because it won't work on Linux.

But for most people, if you actually calculate it out, the DRM is the only bad part. It's otherwise a damned good model -- as others have pointed out, it costs about the same as satellite radio, but you get to pick what you want to listen to, and you can throw it all on a Zune (or any PlaysForSure player) and take it wherever you want, play it in whatever order you want, etc. At least a few people who use this have calculated for me how much each track/album they've downloaded would cost on iTunes or CD, and then how long they'd have to stay subscribed for the subscription to start to be a bad deal.

It was 15 years.

And I really don't think I will be listening to the same music in another 15 years. Some of it, yes, but I'll certainly be listening to other, yet-to-be-released music.

"But what if the service goes away???"

A legitimate complaint for something like Steam, where if the service goes away, you can't play Half-Life 2. There's really no alternative to that. But most of the music that's available on one service would be available on another, so they're basically a commodity. And Internet is fast enough that having to re-download them is entirely not an issue, assuming the interface is made slick enough. (Have it pretend they're already on my hard drive, so I can throw them in a playlist, then download them on demand.)

So yeah, the only reason I buy music by the song/album, and listen to internet radio, is because that all works on Linux, and generally isn't DRM'd, and I have the option of putting it on non-PlaysForMaybe players -- like, oh, an iPod. (Or an iPhone, or an Archos with Rockbox, or the Ubuntu machines down at our local radio station...)

Monthly Rental Fees

[Swifti]

Can someone explain to me why we love Netflix, a service where we get to watch unlimited movies for a monthly fee, but services like Napster and Rhapsody, where we get to listen to unlimited music for a monthly fee, is claimed to be an anathema to consumers?