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Apple Mulls Flat-Rate "Unlimited Music" Option
Posted by
Zonk
on Wed Mar 19, 2008 03:21 PM
from the sounds-delicious dept.
from the sounds-delicious dept.
Mike writes "Apple is in discussions with the big music companies about an 'all you can eat' model for buying music that would give customers free access to its entire iTunes music library in exchange for paying a premium for its iPod and iPhone devices. Finally, it looks like the industry (or at least Apple) is 'getting it'. The real question is not whether the big music companies will go for it, but rather, who will be the first one to get smart and agree to offer it?"
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Submission: Apple Mulls Flat-Rate "Unlimited Music" Bu by Anonymous Coward
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As long as (Score:5, Insightful)
Re:As long as (Score:5, Informative)
Parent
Re:As long as (Score:4, Informative)
Mind you, you can already get this feature from Rhapsody To Go for $14.99/mo for unlimited access to ~4.5 million songs. They've had this feature for quite a while now.
Parent
Re:As long as (Score:5, Informative)
In the first case, Apple may have a monopoly in MP3 players. However they have done nothing anticompetitive (again, the example where Microsoft threatened to terminate Windows licenses to Compaq because they bundled Netscape). Anticompetitive means it hurts Apple but it hurts their competitors more. Anticompetitive would be withholding iPods from WalMart until WalMart stops selling Sony.
Offering a subscription service to iPod owners is not anticompetitive because it does not prevent the competition from responding in like, nor from competing.
Microsoft terminating Windows licenses from Compaq is anticompetitive because it stops Compaq from bundling Netscape; stopping the competition by manipulating their monopoly in Windows licenses.
So, again, how is offering a subscription service for iPods and iPhones anticompetitive? It doesn't stop Amazon from offering DRM free MP3s, it doesn't stop Microsoft from releasing their own subscriptions, it doesn't stop Sony from partnering with Rhapsody for a similar service.
Parent
Re:As long as (Score:5, Informative)
* Dumping, where products are sold into a market at a low price which renders competition impossible, in order to wipe out competitors.
This might be dumping if Apple did not "pass on" the price to consumers. Given the initial up-front fee, however, the consumer appears to be paying fairly for this service.
* Exclusive dealing, where a retailer or wholesaler is 'tied' to purchase from a supplier.
This isn't exclusive dealing because the consumer can still buy music from Amazon, WalMart, Best Buy, etc and use it on the iPod. Likewise the music distributors are free to continue selling CDs and license to Amazon.
* Barriers to entry (to an industry) designed to avoid the competition that new entrants would bring.
Apple has established no barrier to prevent others from entering the market; witness Amazon's MP3 store
* Price fixing, where companies collude to set prices, effectively dismantling the free market.
This would be the case if Apple were colluding with Microsoft and Nokia so all paid the same price for licenses. This is not happening.
* Refusal to deal, e.g., two companies agree not to use a certain vendor
This would be the case if Apple were colluding with Microsoft and Nokia to lock out a certain vendor. This is not happening.
* Dividing territories, e.g., you get everything west of the Mississippi, we take everything east
This would be the case if Apple were colluding with Microsoft and Nokia for different regional markets. This is not happening.
* Limit Pricing, where the price is set by a monopolist to discourage economic entry into a market.
If we argue that Apple is a monopoly in MP3 players, this would only be applicable if they set the price of iPods low enough to prevent competitors; since this doesn't apply to the music store, nor is Apple charging too low a price, this doesn't apply.
* Product tying, where products that aren't naturally related must be bought together; this prevents consumer choice.
This would apply if the products weren't actually related; iPods play music, so purchasing a music subscription with your iPod actually makes sense. This also does not prevent consumer choice because consumers would have the option of not buying into the subscription.
* Resale price maintenance, where resellers are not allowed to set prices independently.
Resellers are free to raise prices; lowering prices would lead to losses and that is not illegal nor prohibited by Apple either.
* Coercive monopoly - all potential competition is barred from entering the market
This is what Microsoft practiced, using it's monopoly to prevent Netscape from gaining traction. Apple has not practiced that here, either.
Parent
Re: (Score:3, Informative)
Yes, Apple does prohibit lowering prices by reseller. Apple publishes an MAP (minimum advertised price) for all of its products, and will revoke the license from any Apple reseller who undercuts the MAP. The MAP is the same price that the Apple store (online or brick and mortar) markets the product.
This is why Apple products are identically priced no matter where you buy them.
Re:As long as (Score:4, Insightful)
They aren't hurting consumers with this offer.
They aren't hurting competitors with this offer.
They aren't hurting affiliates with this offer.
Therefore there is nothing illegally anticompetitive with this offer.
They would need to be using their iPod monopoly to hurt the consumer; like raising prices of iPods for users of other music stores, or denying access to stores like Amazon or Walmart for running music stores.
Neither has happened.
Parent
Re:As long as (Score:5, Informative)
There is nothing wrong with an iPod only deal if they aren't actively hurting competitors; again, the example of raising iPod prices for people who own Creatives would be anticompetitive. So would denying sale of iPods to WalMart for supporting PlaysForSure or Zune, or to Amazon for running an MP3 store.
And this doesn't hurt consumers because consumers benefit from this deal (if they buy it). And consumers who don't buy it aren't hurt, at all. The absence of benefit is not harm.
Parent
Re: (Score:2)
Re: (Score:3, Interesting)
Right now, the conceptual actions of the **AA are hurting artists by reputation even more than the pure $ effect with their fear campign.
Once Apple gets a lock on the Flat Fee model, they can work on weird ways to funnel the money to the artists. "Donate your dollar to the artist, save a dollar on an ipod" or something.
Re: (Score:3, Insightful)
They're a BUSINESS, not the saviors of the planet.
They have a duty to their stockholders to maximize their profits.
If anybody starts a revolution with the music industry, it certainly won't be apple. More than likely it will something like last.fm, imeem.com or the pandora project.
Re:As long as (Score:5, Insightful)
Parent
Re: (Score:3, Insightful)
Re: (Score:2)
Of course, that would require pretty strict DRM. Apple would have to scrap the whole "rip audio CD" thing, which would be a dealbreaker for me at least.
Re: (Score:3, Interesting)
I want to own my music.
What happens when the music you buy turns out to be music you don't actually like all that much? Or maybe after a few years your tastes mature and you don't really like that album you bought so much anymore, what then?
I own a Zune and gladly pay the bad music insurance [penny-arcade.com] because I know my tastes fluctuate wildly. The freedom to download 20 albums at a time (guilt-free mind you), then scrap the 18 I decide I don't like is, to me, paramount to actually "owning" music I might regret buying.
As an Ipod owner (Score:4, Interesting)
Free? (Score:5, Funny)
You keep using that word. I do not think it means what you think it means.
Re: (Score:3, Insightful)
You are neither getting a product free of charge (gratis), or having unlimited access with the ability to use the music freely forever, like you would expect when purchasing a DRM-free mp3 or CD (libre).
Re:Free? (Score:5, Insightful)
Are you on crack? DRMd music is not free as in freedom.
This scheme is nothing more than a pay-up-front subscription service - one copied from Nokia at that.
Parent
Great for the consumer. (Score:2, Interesting)
Big companies are the supplier... (Score:4, Insightful)
I disagree. Big companies still supply the music. The ITunes store would go out of business overnight of all of the labels pulled their songs from it. There are still some indie bands out there, but in terms of sheer scale, the big companies still hold many of the cards. Granted, it would be foolish of them to cut up a revenue stream, but the big companies still have the product to sell, and their input should not be dismissed.
Never going to happen with me, friend (Score:5, Insightful)
Re:Never going to happen with me, friend (Score:5, Informative)
Parent
"Getting it"? (Score:4, Insightful)
Re: (Score:3, Insightful)
This is just Subscription model 2.0 (Score:3, Interesting)
But to pay 100 bucks to use it "unlimited" as long as you are DRM'd? No thanks.
Re:This is just Subscription model 2.0 (Score:4, Insightful)
With this kind of service, DRM is a big turnoff. But I am not sure how this service could possibly be offered without DRM. The need for a special client program is also a turnoff: why not just provide the catalogue on a website and rely on the media player for DRM authentication?
Parent
Re: (Score:3, Interesting)
a.) There are two million 'nobodies' subscribed to Rhapsody right now.
b.) Cable/Satellite TV already uses that model, only it's not on-demand. Not only is that successful, but they're throwing ads on top of it! Heh.
The big problem with it isn't the business model, it's getting people to wrap their heads around the idea that it's not the same as iTunes. Music subscription isn't a music store, it's an
What?! (Score:5, Insightful)
Apple has the most successful internet music distribution system available. From the millions of iPods sold to the billions of songs sold on iTunes. And needless to say, everyone else who has tried the "all you can eat" music pricing model has failed.
So please inform me exactly what Apple is finally getting! Thanks. I won't be holding my breath.
Re:What?! (Score:5, Interesting)
Which is probably why the rumors are heavy on the fairy-tale customer-facing product and the investor-pleasing record-company-facing revenues, and really light on the implicit restrictions and technical questions. I'd imagine the RIAA simply figured out that while $x/mo doesn't work for consumers, "$Y for as long as you own the device" does. (even when device turnover rates are used to ensure mathematical equivalence)
The only thing Apple seems to be 'getting', is pushed by the record companies to offer some of those seductive 'recurring revenues' that Napster/MS/et al keep promising.
Parent
The first line in the article contains a key word (Score:4, Insightful)
DRM'd? Check Techdirt (Score:3, Interesting)
Re: (Score:2)
Re: (Score:3, Insightful)
I can.
To beat piracy, you must provide better service, not worse. As long as there are Flac torrents out there, I will never buy DRM'd AACs. But when I do find a band I like selling Flac downloads, I buy them.
Understand, DVDs almost do not count anymore, as CSS has been braken everywhere for years, and every new scheme is more desperate and futile than the last -- yet NetFlix still makes money. If Apple provided this service without the DRM, they would st
Pay for music? (Score:3, Funny)
How much money... (Score:2)
Silly Apple... (Score:2)
Re:Silly Apple... (Score:4, Funny)
So, you don't have Comcast?
Parent
I think someone's a bit naive here... (Score:5, Insightful)
I think this is a bit naive (and I don't think it's Steve Jobs): people tend to eat more at a smorgasbord than if they have to pay for each entree, and this effect would be even greater when they have room for thousands of entrees in their digital stomachs.
Sweetness (Score:4, Interesting)
Music Industry feels "Entitled"... (Score:5, Insightful)
Entitled to something!? Are you kidding me? Entitled to a middle finger up their ass maybe. Certainly not entitled to stealing the profits of another company's successful product.
I'm not sure it's Apple that's thinking about this but rather the Music companies trying to push this on Apple. What they'd really want is a monthly fee from you every month of every year for the rest of your life. Oh and if you decide to stop paying, well then you're shit out of luck. Thanks, but no thanks. I'll stick with paying for the music I want once and keeping it forever.
This Wouldn't Work (Score:3, Interesting)
Even if they DRM the music I can still stream rip it. I mean after all, the data still has to be transmitted to me and stored on an iPod somehow.
Labels Already Don't Like iTunes - Never Happen (Score:3, Insightful)
But not everyone sees Apple's all-or-nothing approach in such benign terms. The music and film industries, in particular, worry that Jobs has become a gatekeeper for all digital content. Doug Morris, CEO of Universal Music, has accused iTunes of leaving labels powerless to negotiate with it. (Ironically, it was the labels themselves that insisted on the DRM that confines iTunes purchases to the iPod, and that they now protest.) "Apple has destroyed the music business," NBC Universal chief Jeff Zucker told an audience at Syracuse University. "If we don't take control on the video side, [they'll] do the same." At a media business conference held during the early days of the Hollywood writers' strike, Michael Eisner argued that Apple was the union's real enemy: "[The studios] make deals with Steve Jobs, who takes them to the cleaners. They make all these kinds of things, and who's making money? Apple!"
The labels have already locked themselves into Steve's golden iHandcuffs with DRM on the iPod + iTunes platform with fixed price songs so they will be very careful before they give over even more power to Apple to run their business, or what is left of it anyway. I do not see them agreeing to a monthly subscription for the entire iTunes catalogs, such a move would signal complete and utter desperation on the part of the music labels.
One-time payment less than 2 months of Rhapsody? (Score:4, Insightful)
Rhapsody costs $12-$15 a month (depending on your options), and you can listen to the music as long as you keep paying the monthly fee. If Apple can actually talk the big labels into granting unlimited lifetime downloads of music, that you can keep, for $20... I'll be stunned. That's a huge value there. Even at $80 that's a huge value.
I could see the labels going for a $20-per-iPod tax, maybe. I can't see them going for a special model that costs $20 extra. You just know that anyone who buys the $20 extra model is going to actually use the service. Maybe the statistics show that currently the average customer buys $20 worth of songs, but this all-you-can-eat plan slices away any future chance of that dollar amount going up. We're talking about an industry that is pricing CDs at $20... can Apple really get them to do this?
P.S. If you have never tried an all-you-can-eat music service, I suggest you try the two-week free trial for Rhapsody. You will probably see the appeal. It's easy and fun to find new music. Sometimes I don't make up my mind whether I like something until I play it all the way through a few times; it's nice to be able to do that.
http://learn.rhapsody.com/ [rhapsody.com]
Disclaimer: I don't work for Rhapsody but I do work for the company that owns it.
steveha
Hey Apple, ask EMusic before you try this (Score:5, Insightful)
The problem is that once you make it unlimited, a small but not insignificant percentage of users will immediately attempt to download the entire iTunes library. Hey, disk space is cheap, why not try, if there's no additional charge per track?
The only way this might work is if Apple doesn't have to pay even 1 cent to the record companies per download for people who download tracks under the unlimited plan. At least that way their only cost bandwidth.
Implications in Canada (Score:3, Interesting)
1. The Canadian Copyright Act allows one to make a copy, for personal use, of someone else's music.
2. There is no DMCA equivalent to prevent the breaking of DRM in Canada.
3. For the cost of an iPod plus the $20 Apple buffet fee, a single pioneering Canuck could download infinite iTunes.
4. The other 31,000,000 Canadians could leech his entire music collection for free.
The true North, strong and free. Free as in Apple Hefeweizen.
Welcome to eMusic, circa 1999 (Score:5, Insightful)
fair disclosure/conflicts of interest (Score:3, Interesting)
It's just my hunch, but the free as in freedom or beer advocates are just worried about paying for something that they used to get with a five finger discount.
My disclosure: I have not downloaded content from an unauthorized source.
Re:Why should I care? (Score:5, Funny)
Parent
Re: (Score:3, Insightful)
Even though, like the parent, I'm a CD buyer and have never paid for a single downloaded, I was understanding your argument until you reached this point.
People have always shared music. No, I don't consider that it's acceptable that "sharing" on the scale of Bittorrent or Usenet happens and I have over 1200 original CDs in my collection that proves I'm more than happy to pay a fair p