Universal Music in talks to create iTunes Store competitor
Universal Music is desperate for Apple to face some real competition in the digital music download arena that it is now trying to work with the other record labels to launch their very own iTunes like store. The twist? Universal would like to see hardware manufacturers pay a fee (something like $5) for each device. That device would then have a free, to the consumer, subscription to the label's music service. Universal figures people will be happy because they can get the music they want on their player they want (as long as it isn't an iPod), the hardware manufacturers will be happy because people won't be buying iPods, and the labels will be happy because they can maintain their vise-like grip on the content their artists produce.How can anything go wrong?
[via iLounge]
Reader Comments (Page 1 of 2)
Jon said 2:13PM on 10-12-2007
I don't understand how this benefits them. If they're getting $0.79 per track on iTunes, $5 a month is equivalent to about 6 tracks per month. However, if it was free, I would download hundreds of tracks a month. I buy one or two albums a month which are about $9.99 each so already they're making more from me than from this subscription model, and I don't think of myself as a heavy music purchaser.
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Jon said 2:14PM on 10-12-2007
Oops, that should be $0.70 per track, equalling approx. 7 tracks per month.
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Dan S. said 2:17PM on 10-12-2007
Not to be a homonym Nazi, by unless you're British, or you're referring to a character weakness, it's spelled "V-I-S-E"
For example: "Trapped! Trapped in the soft, vise-like grip of robot lips!"
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bob said 2:31PM on 10-12-2007
the idea is stop people using itunes at a loss, and once they are dependent bump the price right up. also, the way subscriptions make money is the fact that after the 1st month most people will get like 1 song every month or so.
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David Chartier said 2:40PM on 10-12-2007
I honestly think this is one of the best ideas in a long time. Sounds like an innovative win-win, especially for the consumer.
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Eric Steiner said 2:44PM on 10-12-2007
Hmm... First off, non of the current subscription models have done that well. People want to buy music, not rent it. Just ask those folks over at Virgin Music how they feel about that. Secondly, what hardware manufacturers? Few of the existing units come close to the quality and popularity of the iPod. And Universal thinks that just because the music will come directly from them that the hardware will become more attractive? And wait a second here - are they going into business with the other big music providers, or is this just a one trick pony? If these guys want to waste their resources that's fine. They'll just blame their downfall on all the free music downloaders, not their own incompetence.
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Codey H. said 3:02PM on 10-12-2007
Reinventing the wheel here...
anyone ever heard of Rhapsody?? I think it's a little more expensive.. but operates on the same model.
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rp said 3:03PM on 10-12-2007
How is this a win-win for the consumer? I'm not sure if the point of the article was clearly expressed. Universal wants to pass the $5/month (RTA, it's NOT just $5 total, which would probably be acceptable actually) charge along to the mp3/computer manufacturer. Do you think that Apple, MS, Creative, or anyone else is going to say "oh, that's fine, we'll gladly pay you the money and everything will be fine because we don't care about our bottom line!" No, what those companies will do is simply jack the price up on their devices. That's not a trivial amount of money for them or for the consumer.
It's actually complete genius by Universal. Let's say you're like me, and don't listen to any music from any major record label. Universal STILL makes money because the mp3 player I buy has that $5/month built right in. So, don't like top 40 crap? Too bad, you're paying for it anyway.
The only way that that wouldn't happen is if each manufacturer created a subset of mp3 players/whatever specifically catered to this. I'm sure we can all imagine MS doing something like this (Zune 2 Special Major Label Subscription XP Edition), but can you imagine a company like Apple doing it? Highly highly unlikely.
This is FAR AND AWAY a lose-lose for ANY consumer (what about the PC you buy next year? Yeah, that'd undoubtedly have the $5/month charge tacked right on because they want EVERY device that can play compressed music files), not just someone who wants to buy music.
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Libb said 3:08PM on 10-12-2007
The problem with this set up is that the cost of the subscription isn't going to be removed for the consumer, but rather they'll end up paying for it when they purchase their player. If one assumes most MP3 players have a 1.5 to 2 year lifespan, that's a $90 - $120 cost that the manufacturer or cell provider has to cover. That alone would double the cost of a low-end player and significantly increase the price of a larger HDD-basedd player, and that's without factoring in the likely price premium the manufacturer will charge on top of the subscription fee for the "feature" of free music downloads. It's extremely price prohibitive for the manufacturers and consumer, and likely a money losing proposition for Universal, especially if they manage to get any other labels aboard (which brings up another problem - will consumers be willing to pay a premium for free access to only one label's music, when they can instead get a personal subscription service like Napster or the Zune Pass for slightly more per month after purchase and have access to every label?). I really see no advantage to anyone with this ploy, and I sincerely doubt that it'll ever get off the ground.
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Victor Agreda Jr said 3:12PM on 10-12-2007
rp, you've hit upon some reasons a few high-profile artists recently left their labels...
still, I don't see why this has to be a "we win, they lose" proposition. MS still makes Office for the Mac-- so why not have Universal Music items in iTS? Wanna build another iTunes? Cool, do it. But don't lock out a paying customer (or turn me into a torrent pirate) because you get all uppity.
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Jon said 3:13PM on 10-12-2007
#6: I think this is a purchasing model, not a rental model because it was stated that the files do not have DRM. If they don't have DRM, it's impossible to make them expire after a certain time.
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dappleganger said 3:26PM on 10-12-2007
But if you don't have an iPod, you're not cool. Next!
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Raf said 3:31PM on 10-12-2007
But do the songs keep working should you cancel your subscription? Or are they vaporware that no longer play once your subscription is cancelled?
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yesno said 3:44PM on 10-12-2007
The idea is to get the consumer to pay for the subscription up front. The subscription would be good for the life of the device. There would be no worries about music expiring.
This is actually an interesting variation on an idea that EFF had years ago, whereby you would pay a fee on your broadband, to allow you to download music free of restriction.
Once you've got the consumers paying a fee, why bother running your own service? Just say that buying the device gives you a blanket license to download music from whatever store. The lawsuit immunity-pod.
That aside, the biggest problem I see is the reliance on DRM. Also, RIAA would not be allowed to exclude Apple-- refusal to deal is a clear Sherman act red flag.
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Mo said 3:57PM on 10-12-2007
This is actually funny. The numbers strongly suggest that a) the iPod is easily the best-selling audio player (by a massive margin), and b) the iPod isn't dependent upon the store for sales (although they have some measure of impact, it pales into insignificance when compared to the lead the iPod family has upon its alternatives).
People are already buying iPods: if you create a music service that doesn't work with them, you're screwed. Until somebody really does manage to produce an “iPod killer” (and believe me, if they do I'd buy it—I love Apple's products, but it's because they're really really good, not because they have the Apple logo on them), the plan is defective by design. It's not like the majority of people don't ALREADY own an awful lot of the music they listen to regularly, rendering the appeal of subscription services somewhat limited.
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Jim said 4:10PM on 10-12-2007
Since the idea is to tack the subscription fee onto all hardware capable of downloading/playing music, most of us would be paying $20/month subscription- $5 per iPod, cell phone, desktop and laptop, for example. Sure, the cost is "hidden" as part of your initial purchase price, and maybe soon we'll all buy just one killer device that combines every possible function, but how many electronic device owners actually consume $200+ of music per year?
Also, does this include video content, or will that be an additional fee per device?
And there'd have to excluded devices, that are somehow disabled from using content; business and large institutional buyers aren't going to pay huge premiums for business devices. And that will mean some kind of hack being developed to defeat the whole scheme.
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WinkerToupsVernon said 4:18PM on 10-12-2007
It should be half as good as URGE, and 30% less popular than whatever the hell Microsoft uses. So people will pay Universal for the privilege of listening to Universal music on the hardware of their choosing.
Surely the consumer as the enemy business model can't go much further than this.
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Brandon Martinez said 4:55PM on 10-12-2007
If it doesn't work with an iPod, how would the millions of iPod users out there benefit? They don't; they would have to pay a premium (which is what most people complain about to begin with) and buy another player, so it's nowhere near a win-win. The consumer, once again, gets the crappy end of the stick.
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Luigi193 said 5:08PM on 10-12-2007
Subscription:
1. Get a crap load of music
2. Audio Hijack said music
3. Done
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Patrick Walker said 6:23PM on 10-12-2007
What can go wrong?!
How about big names dropping the labels altogether and the labels have zero content to sell? Radiohead, Nine Inch Nails and now Madonna have dropped relations with labels.
Once someone becomes the trailblazer, everyone starts to follow.
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