When I refer to iTunes above, I don’t mean the brand or the
site. Rather, I’m referring to the business model of selling digital music by
the track. In fact, much to the credit of Apple’s brilliant marketing, very
loyal following, and leadership position with their iPod and iTunes products,
buying songs on an itemized basis may perhaps be the most popular, fastest
growing ever obsolete technology.
Those that are legally acquiring digital music on-line are likely buying music on an itemized basis and not subscribing
to a service that allows unlimited streaming and downloads for a flat fee.
These services include Rhapsody, Yahoo Music, Napster, and perhaps a few
others. For those not familiar, the way these new services work is
simple. For a flat fee – I currently pay $5 per month – you can download any
song in their library. No, you don’t own it. But so what? You can take the song
with you on an MP3 player. You can, pretty easily, listen to any song on your
home stereo or car stereo.
The only thing you can’t do with a song you’re renting is
burn it to a CD, although you can still buy the track if you want to do that.
Of course, even if you buy a song you have limited rights, and the concept of
burning CDs will be obsolete at some point too. People will just share
playlists since others will have access to an unlimited library as well. This
kind of sharing currently takes place among subscribers of the same service.
But eventually a subscriber of service A will be able to share a playlist with
a subscriber of service B. Add to that the power of Multiply where you can
share and converse with your social network!
One thing you don’t get with the subscription model is the
hassle of ownership. I’ve read a few stories recently about iTunes users losing
their library of paid-for music via hard-drive crash or some other catastrophe
and there being no easy way to replace it. I used to
make sure I backed up my MP3s because I felt restoring a backup
would be easier than re-ripping. I ultimately gave up backups because my
library got too big and I figured I could always re-rip. Then I had to upgrade
hard-drives which, while not necessarily expensive, is another headache. Now,
I’m worry free.
The biggest benefit is the freedom of being able to listen
to new music. Like a happy Netflix user,
I find myself looking more toward unfamiliar and new than the familiar and old.
During dinner I’m listening to old jazz. In my bass lessons I’m learning how to
play blues, so I’m listening to lots of blues. I read a review of 4 or 5 new albums,
and then I listen to them. It doesn’t cost me anything (extra) to listen to
something new.
Although I’ve felt this way for a while what prompted me to
write today was an article I read on CNET, HP drops iTunes, taps
RealNetworks. Although the focus of the article is about Hewlett-Packard
shifting from iTunes as the default music player on its computers to Rhapsody
which in itself is partly indicative of the trend I’m predicting, what I find
most compelling is the last paragraph:
RealNetworks also on Thursday is expected to unveil a
separate distribution deal with cable giant Cox Communications, which for the
first time will allow the music service's monthly fee to be included on a
customer's cable bill.
Imagine what making “Unlimited Music Downloads” a simple
option when signing up for cable would do for adoption. Basic or Digital? Would you like HBO? Would you like DVR
service? Would you like internet? VoIP? Unlimited Music?
I’m not predicting that the model of paying $0.79 for a song
will go away. Just like you can still buy vinyl, there will niche uses. But
based on the overwhelming endorsements typical of unlimited music subscribers and the fact that there aren't any benefits to the itemized model, I do believe that someday everyone will be
paying flat monthly or yearly fees.
BTW - $5 is really cheap. 
