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Apple to Offer Unlimited Music Plan?
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This is great.
I currently am forced to have Windows via bootcamp simply to use Real Rhapsody service.
It's cheap and has great collection of music always available. If Apple decides to do something like this I would definitely switch simply because the iTunes library is so much larger than the one of Rhapsody (in the Classical/Baroque music category at least)
I currently am forced to have Windows via bootcamp simply to use Real Rhapsody service.
It's cheap and has great collection of music always available. If Apple decides to do something like this I would definitely switch simply because the iTunes library is so much larger than the one of Rhapsody (in the Classical/Baroque music category at least)
this makes more sence than you think
According to the wikipedia section on iTunes, on January 15, 2008 Apple has sold 4 billion songs to date. And according to the wikipedia section on iPods, on January 22, 2008 Apple has sold 140 million iPods to date.
If we divide 4 billion by 140 million we get 28.57. That means that Apple is selling less than 29 songs per iPod, if they charge a $80 surcharge for unlimited access to all iTunes songs, they are still making a killing with $51 profit per iPod. And that is not even taking into account the deals on albums.
Unfortunately I can not find the data for the estimated number of cds that are transfered to itunes, then we might be able to see a more accurate price table. But whatever way you look at it, this would push people to buy new iPods, good for Apple and the record companies.
According to the wikipedia section on iTunes, on January 15, 2008 Apple has sold 4 billion songs to date. And according to the wikipedia section on iPods, on January 22, 2008 Apple has sold 140 million iPods to date.
If we divide 4 billion by 140 million we get 28.57. That means that Apple is selling less than 29 songs per iPod, if they charge a $80 surcharge for unlimited access to all iTunes songs, they are still making a killing with $51 profit per iPod. And that is not even taking into account the deals on albums.
Unfortunately I can not find the data for the estimated number of cds that are transfered to itunes, then we might be able to see a more accurate price table. But whatever way you look at it, this would push people to buy new iPods, good for Apple and the record companies.
Add me to that list; porting this type of model to tv would seriously make it an instant hit.
Amazon has my business when it comes to purchasing digital copies of music and/or the physical CD itself. Should Apple offer a DRM free subscription service I would switch back to the iTunes store.
This doesn't interest me personally, but I am glad for the people who want it. I think it's good to offer both options.
yeah, this is how the argument goes - but it's dreamland (except for the artists)
Actually the production costs are not so much lower as you suggest, and will in no way offset the much lower income that artists in general would make from this model.
Manufacturing cd's are kind of expensive, true, and those could and will eventually (in some years, probably 4-6) be almost eliminated (manufacturing cd's is less expensive than manufacturing vinyl was), but by far the biggest cost of making music is the actual cost of paying sidemen, studios, transportation to/from where the music is recorded (not all music can be made by sending tracks around the world digitally to be overdubbed on) etc etc. Yeah, it costs real money to make quality music believe it or not. Sgt. Peppers would not have gotten made in it's day without access to really cutting edge studio techniques, nor would most of todays hip-hop or even acoustic jazz be made without top quality gear.
We know that the business model has to change - and we are all eager to make the transition. But you know what - pricing music all the way down to nothing is not the way to do it. We have just released music by a well known client of ours (in the jazz world), and guess what - people are happy to pay $20 per cd (it's a double album with over 120 min of music) at the gigs, and while the album is being offered as a 320 kbps download as well as a double cd, the ratio of downloads is only 45% even though this artist has a very young fanbase. That download to CD ratio is on the high side of what's still normal.
But the bottom line is that people are willing to pay what they consider a fair price for great music. At present they can buy this album for 3 lattes at Starbucks, and I think the artists fans feel that's a good deal considering the countless hours of enjoyment they are going to get from it.
Apple would not make 1/100 the amount of sales of iPod's if it wasn't for the music of great artists that could be played on it. Yeah, I also love the Podcasts, movies, audiobooks and what not..heck, I love my iPod and iPhone. But don't start a new scheme of ripping off artists - because you know what would happen if it was all subscription based fees to be passed on to the artists? Then only U2, Britney Spears and the rest of top 100 on Billboard would see any money - the rest of the artists would not mean much to this model, and they would not have the funds to see if the books are being cooked once they get their meager part of the funds being distributed.
A music-business re-write of Dante's hell if you ask me.
However, the price will not be $20. It might be something like $50 or maybe even $80. Ask yourself this: How often does the average teenager actually pay even $1 a year for the music he listens to? He torrents all of it or grabs it from his buddies. He is NEVER going to be buying CDs, or even downloading for pay. But, he does buy a new ipod every two years. So, you won't get him to buy the 5-10 CD's a year he might have bought 15 years ago, but you can get him to pay the itunes ipod access fee every other year, because it's built in when he replaces his ipod. Sure, your gross revenue is less, but your production cost is FAR less, you're just sticking bits on a server. You are still raking in huge net profits and you have a business model than now works again for you, and it's one that most people can't, or just won't, try to get around because they want an ipod and, hey, now they get a bunch of "free" music with it.
This also becomes a way to thwart piracy (or pay for it) in pirate happy lands such as China IF the ipod can establish traction in such a place, and, I think it can, the branding is good enough if the pricing is right. Obviously, it would be a cheaper, stripped down ipod with a lower royalty fee to fit that market. But it would be a lot more income than they are getting from such a market now, which is close enough to zero to be zero.
I for one, would have no issue paying $20, 50, or even, maybe, 80 bucks extra for my ipod if it meant I could get unlimited access to all the labels stuff on Itunes and keep 30 songs a year DRM free that I could move anywhere I wanted. I know I'll cycle my ipod every two or three years, so that puts my "music usage fee" at 2-3 bucks a month. I can dig that. I can support that. That's what it SHOULD be costing. And, the labels will still ROLL in money - money they would never have expected to see from most of those users. And, they can still sell CDs and online singles, and etc and derive profits from those things. At some price point, a fairly low one, this makes TREMENDOUS sense for the labels. If they can't see that, they are foolish. Oh...wait...maybe it won't work.
Actually the production costs are not so much lower as you suggest, and will in no way offset the much lower income that artists in general would make from this model.
Manufacturing cd's are kind of expensive, true, and those could and will eventually (in some years, probably 4-6) be almost eliminated (manufacturing cd's is less expensive than manufacturing vinyl was), but by far the biggest cost of making music is the actual cost of paying sidemen, studios, transportation to/from where the music is recorded (not all music can be made by sending tracks around the world digitally to be overdubbed on) etc etc. Yeah, it costs real money to make quality music believe it or not. Sgt. Peppers would not have gotten made in it's day without access to really cutting edge studio techniques, nor would most of todays hip-hop or even acoustic jazz be made without top quality gear.
We know that the business model has to change - and we are all eager to make the transition. But you know what - pricing music all the way down to nothing is not the way to do it. We have just released music by a well known client of ours (in the jazz world), and guess what - people are happy to pay $20 per cd (it's a double album with over 120 min of music) at the gigs, and while the album is being offered as a 320 kbps download as well as a double cd, the ratio of downloads is only 45% even though this artist has a very young fanbase. That download to CD ratio is on the high side of what's still normal.
But the bottom line is that people are willing to pay what they consider a fair price for great music. At present they can buy this album for 3 lattes at Starbucks, and I think the artists fans feel that's a good deal considering the countless hours of enjoyment they are going to get from it.
Apple would not make 1/100 the amount of sales of iPod's if it wasn't for the music of great artists that could be played on it. Yeah, I also love the Podcasts, movies, audiobooks and what not..heck, I love my iPod and iPhone. But don't start a new scheme of ripping off artists - because you know what would happen if it was all subscription based fees to be passed on to the artists? Then only U2, Britney Spears and the rest of top 100 on Billboard would see any money - the rest of the artists would not mean much to this model, and they would not have the funds to see if the books are being cooked once they get their meager part of the funds being distributed.
A music-business re-write of Dante's hell if you ask me.
artists and their managers
Mikeinternet you live in la-la land. Artists would not be able to commit themselves so deeply as it takes to make the incredible music that they make if they could not make any money from it. Nor could they do so if they did not have people to support them - i.e artist management.
Why do you think almost every single successful artist out there has a manager? Because it's a model that doesn't work for them? Even if they don't have a manager, per se, then they got to pay for assistants and support staff. Artists don't have the time in the day to organize their own travel, their publicity etc, and many of them do not have the inclination to do so either. If an artist doesn't get on a plane, he or she can't play a gig - simple as that.
An artist manager is often times an entrepreneur who takes a chance on an artist, and helps the artist on all levels - including the creative level. And artist managers live precarious lives too, because their income flows are tied entirely to the artists they represent. There's a consistency of interest there, which is one reason why you will see artist managers such as myself defend artists rights to make money from their creativity - just like people at Apple and everybody else does.
Mikeinternet you live in la-la land. Artists would not be able to commit themselves so deeply as it takes to make the incredible music that they make if they could not make any money from it. Nor could they do so if they did not have people to support them - i.e artist management.
Why do you think almost every single successful artist out there has a manager? Because it's a model that doesn't work for them? Even if they don't have a manager, per se, then they got to pay for assistants and support staff. Artists don't have the time in the day to organize their own travel, their publicity etc, and many of them do not have the inclination to do so either. If an artist doesn't get on a plane, he or she can't play a gig - simple as that.
An artist manager is often times an entrepreneur who takes a chance on an artist, and helps the artist on all levels - including the creative level. And artist managers live precarious lives too, because their income flows are tied entirely to the artists they represent. There's a consistency of interest there, which is one reason why you will see artist managers such as myself defend artists rights to make money from their creativity - just like people at Apple and everybody else does.
Right!
God, talk about short-term memory. Maybe the article should have STARTED with this! I can't believe all the comments about how the labels wouldn't do this when it was THEIR idea last year!
Maybe a refresher article is in order for everyone that is apparently new here?
Not to mention the fact that there are currently music-rental services out there like, oh, I dunno...Napster! How can there be people saying this couldn't work? (Not that Apple won't do it, but that it COULDN'T work.) How can there be so many people who haven't heard about Napster and how it works now?
Napster - LOL
I have yet to hear of an artist that paid for a ham and cheese sandwich with income derived from Napster or any other subscription service.
I have yet to hear of an artist that paid for a ham and cheese sandwich with income derived from Napster or any other subscription service.
The recording industry would be fools not to take this. $20 x 40million iPods/yr is $800 million a year. Just can't pass that up. Their alternative is for Jobs to say, "fine, we'll leave it how it is" to be left staring at the revenue curve going down and to the right...
$20 from your iPod, $20 from your phone, desktop, car... Doesn't take many $20 revenue streams to break even.
I won't buy into a monthly subscription. I might drop $20 for a few years access to the catalog, but not $80. I just don't listen to enough big-label music to care. Roll $80 into the price of all iPods and Apple's shooting themselves in the foot.
What I dread is that once everyone has bought in for years at a time, there's no need to draw them in with higher quality product. I'm afraid new acts and back catalog will both suffer-- the only thing they do is cut into the profit margins.
$20 from your iPod, $20 from your phone, desktop, car... Doesn't take many $20 revenue streams to break even.
I won't buy into a monthly subscription. I might drop $20 for a few years access to the catalog, but not $80. I just don't listen to enough big-label music to care. Roll $80 into the price of all iPods and Apple's shooting themselves in the foot.
What I dread is that once everyone has bought in for years at a time, there's no need to draw them in with higher quality product. I'm afraid new acts and back catalog will both suffer-- the only thing they do is cut into the profit margins.
Sounds like we aren't so far from that today, though, if you listen to artists.
Actually, really, where I'm at is: I am for the market deciding where this will go. And, it already is. The market is SCREAMING at the record companies. And the labels are pushing their fingers so far into their ears they are lobotomizing themselves.
In reality, there will be several models that will work based on what the artist wants and needs. For recordings, there has never been more direct, open, and cheap distribution technology than artists have today. David Byrne wrote a good piece on this subject last year. It's worth a read: http://www.wired.com/entertainment/music/magazine/16-01/ff_byrne. What will not survive is the labels selling goods at a price FAR in excess of what the market (on average) is willing to pay. There are many reasons for the drop in music sales over the last decade, but this is a key and seminal part of it. If the labels had started selling music at $.50 a track in 2000, they would have had PILES of money to jump around in and millions more happy listeners. Of course, that wouldn't have necessarily left the artists any better off. However, the technology would have still, inexorably, brought us to the point we are at today, where artists, if principled, can control nearly all aspects of their music. So, if you don't like your label screwing you, do what Aimee Mann does. If you aren't willing, then you don't really want it that much, and you can try and get as much as possible in your deal with the devil instead.
My personal favorite model is the one where I buy the music from the artist, the artist gets all the money, and can give me a much better deal on their music because they get most of the gross, and all of the net, with no music industry leeches sucking off of their talent. However, if that artist managed model is what it takes for the artists to get the bulk of the profits from their talent, then I expect the artists to figure that out, that's not part of my job as a music buyer. My job is to say, here's what I'm willing to pay, you figure out if you can make it profitable. If not, and if enough of the market agrees with me, then you need to find another way to put bread on the table.
Then, if it is included in future ipods, don't buy the ipod. Vote with your dollars. Tell Steve you won't pay for it by not buying it.
The only reason something like this hasn't happened already is because Apple have never wanted to do it - the major labels would of signed up for it a long time ago. They already have similar schemes in place, the per device fee with Nokia and the monthly subscription with Napster for example.
They'd obviously use DRM to ensure the music was only played on the relevant device and / or that you couldn't play them once the subscription lapses.
Remember that Apple make their money from hardware and that the iTunes store runs at not much better than break even for them. So I can't see how Apple would lose out though it makes you wonder why they wouldn't of done this sooner.
Not sure whether it would work for me but I'm sure it would for plenty of people and that iPod sales would rocket skywards.
They'd obviously use DRM to ensure the music was only played on the relevant device and / or that you couldn't play them once the subscription lapses.
Remember that Apple make their money from hardware and that the iTunes store runs at not much better than break even for them. So I can't see how Apple would lose out though it makes you wonder why they wouldn't of done this sooner.
Not sure whether it would work for me but I'm sure it would for plenty of people and that iPod sales would rocket skywards.
believe me - I don't cry any tears for the major labels.
On an individual level, I've seen many totally committed, very hardworking and creative staff members at labels (major or otherwise) - most of whom are underpaid compared to what they could make elsewhere. Most do it for the love of the music.
But the business entities behind them are just that- they don't give a damn about the artist, and have historically tied them up in contracts that would make a credit card company blush with envy.
You are right - it is between the artist and his fans. And this is where we are going with our clients. Their fans are willing to go far in support of their favorite artists, happy to see them do well. They travel thousands of miles just to catch a concert. The artist agree to work 24/7 and be submitted to ridiculous travel, generic hotel rooms and being away from the family so that he/she can be there for the fans.
So that's what we will do - establish direct relationships with the fans. And not be bundled off in some huge garage sale that some label is having just so that it can afford to pay the CEO that severance pay for his years of hitting the middle of the road without fault.
On an individual level, I've seen many totally committed, very hardworking and creative staff members at labels (major or otherwise) - most of whom are underpaid compared to what they could make elsewhere. Most do it for the love of the music.
But the business entities behind them are just that- they don't give a damn about the artist, and have historically tied them up in contracts that would make a credit card company blush with envy.
You are right - it is between the artist and his fans. And this is where we are going with our clients. Their fans are willing to go far in support of their favorite artists, happy to see them do well. They travel thousands of miles just to catch a concert. The artist agree to work 24/7 and be submitted to ridiculous travel, generic hotel rooms and being away from the family so that he/she can be there for the fans.
So that's what we will do - establish direct relationships with the fans. And not be bundled off in some huge garage sale that some label is having just so that it can afford to pay the CEO that severance pay for his years of hitting the middle of the road without fault.
no people will still want to keep their music that the download permanently. the way im perceiving all this to work, you just get access, not ownership.
I'd rather see a subscription fee for AppleTV movie rentals (ala Netflix). All the movies you can download/watch a month for a flat rental fee. THAT would be useful (seeing as I just got an AppleTV as a dual AirTunes streamer as part of my new whole house audio system and HD rental solution seeing as Blue-ray discs are very poorly resistant to scratches, which occur constantly with rentals and there are no local places to rent blu-ray anyway (don't want to wait 1-3 days for a Netflix mailing...when I want to watch a movie, I want to watch it the same evening).
I just bought an iPod Touch (as a controller for house music system via Remote Buddy). I guess it would suck to find out if I waited a few more months I could have had unlimited music for it (I doubt they'd offer that backwards for previous sales as they probably want to use it to push all existing iPod owners to buy a NEW iPod and thus make a sizeable fortune for all involved). $20 seems cheap, but not if it means having to buy another iPod (perhaps only be available for larger sizes and may not play on your computer either?)
I just bought an iPod Touch (as a controller for house music system via Remote Buddy). I guess it would suck to find out if I waited a few more months I could have had unlimited music for it (I doubt they'd offer that backwards for previous sales as they probably want to use it to push all existing iPod owners to buy a NEW iPod and thus make a sizeable fortune for all involved). $20 seems cheap, but not if it means having to buy another iPod (perhaps only be available for larger sizes and may not play on your computer either?)
This plan would be the dumbest thing ever considered, right up until Apple actually released it, and then it would be the coolest thing ever.
As usual.
As usual.
Yep. Artists should be happy spending lots of time and money just so they can express themselves. Who cares if they can't feed their families?