Subscription Music - do you really need to own music?

I am a music lover and if I had a couple of million dollars I’d go out and buy all the CDs, LPs and mp3s I could buy. However, I’m not a millionaire, so I had to come up with a different method of creating a huge collection of music without having to spend all of my money.

I began to focus on digital music as it is cheaper and also gives me the option of buying single tracks rather than having to buy the whole album. My research came up with several ways of getting digital music:

Peer to Peer: Napster is perhaps one of the most infamous names in the music industry (despite being a legal company now) and revolutionized the way in which people copied and shared music – so much so that the music industry took notice and closed down Napster. Peer to Peer companies still exist on the web, with ‘torrent’, limewire etc – however, for many reasons I do not use these services. Firstly, you open up your computer to viruses, Trojans and identity theft; more importantly it is illegal and costs the industry millions of dollars a year.

A la carte – Apple really started the ball rolling with the iPod and  iTunes and made this the norm. Essentially you pay for individual songs, similar to the old way of buying ‘45s’. It’s generally the easiest method, especially when using the iPod. Now that mp3s are DRM free, you can buy at any online store.

Subscription – this is a concept that has been around for a while and was invented by Napster (once they became a legal entity) – the concept is simple – pay a monthly fee and get access to their entire library – in some case 7,000,000+ songs. Napster, Rhapsody and Microsoft (Zune) offer services and all are similar.

Ad based – this is another growing idea, and one being adopted by Google. The idea is simple – download as many songs as you want – but you must listen or view advertising to continue to use the music. The business model is still being worked on, and often the number of songs is limited – but it is a growing business, and currently is more prevalent in the UK.

The method I chose is the Subscription Model. Below are more details on this model and the reasons why it appeals to me.

Steve Jobs, perhaps the most innovative CEO in the world has dismissed this model, and stated that people don’t want to ‘rent’ music. However, this model is slowly growing, and there is even an app available on the iPhone that allows you to use the Rhapsody service. In the evolving world of digital music it is one of the better solutions, although the ad based version may eventually replace it.

While there are slight variances between the main companies offering a subscription service, they all follow the same concept. The main features of a subscription model are:

• You can download every song from an extensive catalog to three computers or three mp3 players; the mp3 players must have the ‘Play For Sure’ platform that allows them to play protected WMA files.  (Rhapsody also allows you to use their application on the iPhone).
• The music is in the WMA format and is generally of very high quality.
• You pay a monthly fee to ‘keep’ the music – and must update your mp3 player monthly with a new ‘license'.

If you currently buy two CDs a month ($20) you’d end up with 720 CDs, or around 8000 songs in thirty years. If you pay the same $20 a month for thirty years, you can download the current 7,000,000+ songs currently available plus all future songs. As Napster once said in a poorly constructed commercial during the Superbowl “do the math”

The benefits for me are:

• I can try out new music without having to buy an album.
• I can constantly change my ‘mp3’ player and always have different music should I choose.
• I can set my living room PC player up so it essentially becomes a Juke Box – with 7,000,000 songs to choose from.

There are a couple of valid arguments against subscribing to a service like this:

• Most iPod and iPhone users will simply quote Steve Jobs and say ‘you don’t own’ the music. This is true – but when I consider that I’ve bought the same Rush album on LP, tape, CD and digitally then I’d argue that this is irrelevant. I only really own the music I buy until the next format comes around. I can’t take my LP back and swap it for a new CD.
• You cannot burn the songs to a CD – this is obviously a problem for some people who don’t have an mp3 player, or any way to play a song from their mp3 player in the car.
• Some songs are not available for download – some newer songs may take a month or two to appear on the subscriptions service, or some older ones may not be on there. Additionally, sometimes some bands decide to remove their albums from the service, or only allow for a couple of albums to be listed.
• iTunes is easier to use than a subscription service – this is very true, but once you get used to the service it is easy to use.

Steve Jobs has a lot to say when it comes to subscription services:

"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."

The problem I have with Steve Jobs is that the customer is not interested in it because Steve Jobs and Apple aren’t interested in it – if Apple produced a subscription service it would become the ‘norm’ and have hundreds of millions of subscribers.