iTunes vs Subscription Services

There is a fundamental difference between Music and Movies and Steve Jobs gets it. I explain the difference between Subscription based music services and Renting Music.

I just finished reading this article http://www.engadget.com/entry/1234000210035724/ and I think he is confused about the music industry.

Subscribing to a music service is a seriously small niche market and Apple knows this. That won’t keep Apple from taking that niche though.

When I refer to the renting of movies I’m including going to the theatre, you have a limited amount of time to view the movie but at the theatre you’re on their schedule. And many people only after renting lots of movies will purchase their favorites. This is vastly different than listening to music.

Things you can do while listening to music include cleaning, reading, running, biking, lifting, playing, driving, relaxing, working (lots of verbs) you get the idea. How many of these can you do while watching a movie? Few if any, why, because watching a movie is a verb itself unlike listening to music which is usually secondary to what else you’re doing.

I’ve heard Steve Jobs say that “You may watch your favorite movie a few times but you listen to your favorite music hundreds if not thousands of times” and I totally agree. So what sense does it make to subscribe to something that you’re going to use so much, It doesn’t. Subscribing to a music service is no different than satellite radio, once you stop paying for the service it’s gone.

Services, how does music become a service, if you’re getting married and need a DJ. But casual listening to music will never be a service. Subscription based music is an attempt to turn listening to music into a service. Examples of services, electric company, Xbox Live, .mac, internet provider, trash pickup you get the idea. How does renting music fit into services, I don’t think that it does.

What will Apple do to rain on the other companies subscription service? Several articles online indicate that Apple is already looking to take over the renting of music. I have an idea that truly differentiates subscribing to a music service and renting music.

Renting Music my way, imagine not just paying a flat fee every month but instead paying a single rental fee per song or album. Think about it, you go to the iTunes Music Store and see the O.C. album, well you know the music you hear on the O.C. is cool, but you don’t know if it’s cool enough to buy. So just rent the album for a month for a one time fee of $1. At the end of the month you have the option to buy that album and get $1 off the price since you already paid that to rent it. This approach gives you opportunity to actually demo full songs for a fee and If you buy it you’re not out any additional money, if you don’t buy it or don’t like it, it only cost you $1 to find that out.

How is this different than the subscription service that the others have, it doesn’t tie you into a monthly fee (Napster $15 per month). People hate monthly fees and companies love them because it generate regular revenue. The plan I outlined gives you the ability to listen to music for a certain amount of time before deciding if you want to pay full price, and the fee is one time not recurring.

My plan puts renting music almost on par with renting movies. Small fee to check it out for limited amount of time. My plan differentiates subscribing to a music service and truly renting music.

If Apple takes this type of approach to renting music I believe they could easily kill off companies like Napster.