Tag Archives | subscription model

Are iTunes Subscriptions Inevitable?

Apple CEO Steve Jobs has said in the past that consumers are not interested in subscription music services. He may be wrong: NPD has conducted a survey and found that as many as 7 to 8 million iTunes customers could be willing to pay $10 or month or more for access to their music libraries or to stream music.

Add this one up and you see a potential $840 to 960 million (or more) annual business could be sitting right underneath Apple’s nose. “[This] is roughly two-thirds the revenue garnered by the current pay-per-download model,” NPD analyst Ross Crupnick said.

Such numbers could propel Apple even further ahead of Microsoft in market capitalization, and give it more cash to continue its stratospheric growth. How could Apple turn that down?

There are some indications that Apple’s position on subscription music may be changing a bit. Rumors swirled earlier this year that the company had approached the labels about some type of cloud-based music service, but apparently details have not yet been discussed. That would mean any service probably would not appear for quite awhile yet.

Increasing interest in subscriptions and streaming could have a lot to do with the changing technological capabilities of the consumer. With increasing smartphone usage and fairly widespread coverage now of 3G (and faster) wireless data, the consumer has the capability.

Services like Pandora are nice, however the user cannot control what plays: accessing their own libraries or songs on demand looks increasingly enticing.

Whatever Apple decides to do, it should act fast. Google is said to be working on its own music service to debut later this year. It also apparently will include some type of streaming component, using its strength in search to help it drive business.