unmediated: Looking at the Subscription Model Value Proposition

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March 16, 2005

Looking at the Subscription Model Value Proposition

But the commercial raises a good question: Will you rent albums the way you rent TV programming? If it makes financial sense - and if, armed with that knowledge, you can avoid the competing allure of iPod style and the Apple brand - you just might.

[…] Parents with children ages 10 to 20 know how costly the digital music revolution can be. If you look the other way as they download music using … let’s call them gray-market techniques, your PC becomes irreversibly crippled by spyware. But when you try to encourage them to pay for music instead of stealing it, you quickly discover that even a two-album-a-month allowance adds up.

When used to its fullest extent, Napster to Go lays iTunes flat, financially speaking. For the $15 monthly fee, you’re allowed unlimited downloads. You can put them on up to three compatible portable players, and log in and listen on up to three PC’s. (Napster to Go does charge by the song, however, to burn music to a CD.) Sure, there’s an initial investment, and in homes with more than three listeners they’ll have to share, but for a low fixed price they can all download as many songs as they want, most of which they will soon forget about anyway.

The value proposition is in place. I know I can get tons of music, but can I get tons of good music? There are bands not yet online at all, like the Beatles, Led Zeppelin and AC/DC. But with Napster to Go there is a new discrepancy: songs you must purchase outright, ones that aren’t part of the all-you-can-have subscription deal.

I hit Napster thinking that maybe half of the tracks I’d want would be “buy only.” To my amazement, it was less than a tenth. […]

{…] For the most part, however, the software and the players do their jobs. So let me ask a question that some may consider heresy: How necessary is the iPod?

[…] Though it seems like a lopsided deal - paying less than what Target charges for a CD and getting almost any musical wish granted instantly - the record industry is lobbying hard to make subscription services the next phase in the digital revolution. The labels are using them to get the attention of 15- to 25-year-olds, the group most responsible for the sharp decline in CD sales over the last few years (not to mention the rise of illegal file sharing).

Originally from Furdlog, remediated by yatta on Mar 16, 2005 at 08:52 PM