updated 04:10 pm EDT, Wed April 11, 2007
Apple Ponders Subscription
Apple is reconsidering its attitude towards iTunes subscriptions, research group INTENT MediaWorks claims. Company CEO Les Ottolenghi said today that discussions with Apple staffers had led him to believe that the iTunes Store will see a subscription service within six months despite Apple's previous insistence on a-la-carte downloads.
"Apple is seriously considering a subscription offering right now even though they will probably tell you otherwise," he asserted.
Ottolenghi added that while veteran proponents of subscription services were faring relatively poorly, such as Napster and Yahoo, he believes their failures were more the result of a chicken-and-egg adoption problem where Apple's command of the market reduced the awareness of subscription choices, reducing the demand for (and incentive to use) the music rental model. Inside Digital Media analyst Phil Leigh agreed.
"The number one factor retarding the acceptance of the subscription model is the dominance of Apple," he said. "The idea of subscribing to music is new to most consumers so when the dominant player doesn’t talk about it, the idea seems out of the mainstream."
If offered in a copy-protected form, the subscription service would openly contradict Apple CEO Steve Jobs, who famously launched 99-cent downloads for the iTunes Store in April 2003 with the argument that buyers would prefer not to "rent" their music. The company's recent agreement to drop DRM for EMI's music would also oppose the strategy by encouraging shoppers to pay for unrestricted individual downloads.
However, the INTENT analyst didn't provide details as to the exact subscription format, which could more closely resemble the eMusic approac. The second-place online music store currently requires monthly subscriptions but offers permanent copies for every download.