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  • Do You Want to Rent Music?

    November 24th, 2006

    If you ask Steve Jobs, he’ll tell you that people want to own their music. He can point to the fact that over a billion-and-a-half songs have been sold at the iTunes store, and that Apple holds over 80% of the legal music download market in the U.S.

    However, Microsoft and the various partners they double-crossed with their PlaysForSure digital rights management scheme will claim that you prefer to rent. You really are delighted pay a fixed fee every month, and get a choice of millions of tunes to download to your PC or an “approved” music player. Of course, the iPod is not approved, nor can you make a CD compilation.

    To be perfectly technical, of course, Apple really isn’t selling you a product so much as a license to use music and videos with a few restrictions, such as the number of computers, the number of times a single playlist can be burned onto a CD and so on. The restrictions aren’t bad enough to impact most regular people, but they are still there. You don’t own the thing outright, as you’d own a CD or a DVD. And even then there are restrictions, such as making copies of the latter.

    Forget, for the moment, that you can get around many of these restrictions with unofficial methods. They aren’t sanctioned by the various music services, and the RIAA couldn’t wait to sue you if they catch you on their radar. But that’s how it is.

    The real issue is how do you want to acquire your music. Is Apple right? Or Microsoft and the other companies who offer subscription music as an option?

    The music rental model might seem to be reminiscent of renting movies. You go to your video store, or sign up with Netflix or Blockbuster. With monthly plans, you’re allotted a certain number of movies at one time, to keep as long as you want, and you get replacements, item-for-item, as the old ones are returned. With music subscription services, you can have it all at once, or most of it anyway. Some tracks are not licensed for subscription. You must buy them, and that’s it.

    So even if you wanted to strictly rent, you are apt to run across selections now and then that aren’t part of the subscription program. And there are lots of other issues that aren’t so easily resolved. What happens if you forget to pay your bill on a particular month? And that can happen if you’re credit card reaches its limit, or is no longer active. When the music service attempts to charge the card, it doesn’t work and, after whatever grace period is involved, your music doesn’t work either.

    If your music is downloaded to a player, how does it know you didn’t pay? Well, every so often, you must dock it with your PC to make sure everything is still authorized. If you’re off on an ocean cruise when all this transpires, that’s too bad. You have to stop listening till you get back home. Now why didn’t you take a note-book with you?

    What do you do then? Well, I suppose you can update your credit card, have it charged, and download your library all over again. You want to put everything on a CD? Well, that’s a permanent copy. It can’t just stop working, so the subscription services don’t allow it. It’s the PC, the player, or just buy the songs you want.

    Now when I interviewed industry analyst Rob Enderle about this for The Tech Night Owl LIVE, he said you really wanted to just pay a flat fee every month, rather than buy ala carte. Maybe he talks to different people than I do. I don’t know, but the marketplace has shown, so far, that most of you don’t really want to just rent music. This may be simply because Apple doesn’t offer that choice for its iconic music player, but I’m sure that if customers clamored for it, they’d make it available. Money is money, after all, and the music companies wouldn’t mind a bit if they could charge you for the same stuff forever, or until the service is discontinued.

    And that’s another issue here. If a music service goes out of business, what happens then to all the songs you’ve downloaded, and all the monthly fees you paid? There’s no guarantee how long those music services will function, after all, or whether new players will be supported. Take the Zune, for example. All the songs you rented or bought from the previous Microsoft-sanctioned music systems are simply not supported. You have to start from scratch. Is that a user-friendly approach?

    On the other hand, there’s one positive aspect to music rentals. If can give you a chance to sample new songs, play them a time or two, and then buy them if you choose. A 30-second clip is all right, I suppose, but sometimes it takes more to discover a particular artist. For this reason alone, I can see the logic behind subscription services for avid music lovers as an alternative. You don’t expect permanence, just a chance for discovery and possible purchase later on.

    What do you think?



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    19 Responses to “Do You Want to Rent Music?”

    1. woz says:

      What happens when the music renting service closes shop?
      Well thats exactly what happened here in the Netherlands. Planter Internet use to rent music and then decided it didn’t make enough profit. So they just quit. Leaving all their costumers with nothing but useless music files that won’t play anymore.

    2. Aaron says:

      This is just one man’s opinion, but Mr. Enderle is the Michael Horn of the tech industry. He has a clear agenda and doesn’t allow inconvenient things like facts to get in the way.

    3. Dimitris says:

      Well, using a subscription as a “sampler” does make some sense, but then again you’d be paying for the songs you buy twice (or something)? I’d rather see iTunes offer a personalized streaming radio (like http://www.pandora.com) with an “add to basket” option.

    4. mcloki says:

      With the absolute plethora of Internet radio stations, not to mention free radio stations out there. Why subscribe? If you’re not adverse to changing the channels there’s lots of music out there. I don’t think the model with music is the same as the model with movies. Why? They are two different things.
      Renting music Why? Renting movies.Yes. Who really needs to own a copy of You, Me and Dupree.

    5. This is just one man’s opinion, but Mr. Enderle is the Michael Horn of the tech industry. He has a clear agenda and doesn’t allow inconvenient things like facts to get in the way.

      For folks who don’t understand what Aaron is getting at, you’ll also want to check out our other radio show at http://www.theparacast.com for information.

      In any case, Enderle made a few points worth considering:

      1. Apple gets it in hardware and Microsoft doesn’t. We knew that of course, but these are facts most can agree on.
      2. Music companies are pissed off at Apple for the way it handles its music store pricing and other issues. This is a matter widely quoted in the mainstream press during negotiations over the last contract for music downloads.

      I don’t agree with Enderle’s claim that consumers prefer flat-rate pricing, and his analogies in the interview didn’t pass muster. Renting music is not like renting movies, as I mention in the article itself.

      At the same time, Enderle is entitled to his opinion.

      Peace,
      Gene

    6. Mark says:

      “Renting” music doesn’t seem like a good idea. I know I’d never consider it…

      Mark

    7. Rod says:

      Why asking Mr. Enderle in the first place?
      Nearly every market analysis made by him in the last few years has failed.
      You can check TheMacObserver’s ‘Apple Death Knell Counter’ for some of his pathetic predictions.
      Link here: http://www.macobserver.com/appledeathknell/
      With this record track, if he were a doctor would you trust your daughter in his hands?
      I suppose you love your family, so you don´t need to answer.

      In this perspective, the insertion of Mr. Enderle’s views is less than serious and shows little respect from TMNO toward us readers. Not that there is no market for music rental but please go to creditable sources and proven facts when searching support for this model, or any other for that matter.

      And yes, Enderle is entitled to his opinion, and to push others’ agenda (echoing Aaron). But I would expect TMNO to rise the bar when it comes to sources.

    8. Chris V says:

      In answer to your headline question, I’ll keep this short:

      No.

      🙂

    9. tundraboy says:

      This is how you rent music successfully. Stipulate a minimum music purchase of say, $14.00 a month. Anyone who reaches this threshhold gets a free month’s rental subscription.

      It does the following things:

      1. Eliminates the psychological barrier of after all the subscription payments you made, when you stop your subscription, you’re left with nothing. When you stop buying music, you’re subscription ends but you still have all the tracks that you bought.

      2. Subscriptions are thought of as a reward thrown in by the music vendor. It would then be an enticement to keep those music purchases going. On top of that, the sampling service that the subscription offers will probably spur rather than discourage more music sales. After all it’s revenue that counts. Doesn’t matter whether it’s for rental or purchase.

    10. CarbonCopy says:

      Would I “rent” music?

      Absolutely not.

      Why?

      I simply loath the vast majority of the drivel available on ALL the “for rent” music sites in existence. Why would I rent music i can hear it on my local crappy “indy” or “alternative” (sic – more like “commercial” and owned by Viacom) radio station? Pocket radios are cheap – and you don’t need to pay a subscription fee. But then, I’d rather ram a sharpened pencil in each ear than listen to the radio for any extended time…

      What about the music you simply don’t hear on the radio, and can not find on services that charge subscriptions? Tough…

      I buy my music to keep, because I like to actually support the artists I like. How much of that subscription fee actually makes it to the pocket of the artist anyway? At least with iTunes I know that some percentage of the $0.99 I pay for a song is going back to them, and likely much better than a couple pennies. They at least have deals with and extensive libraries from record labels I support.

      BTW: I found exactly seven songs on Verizon’s VCast that were from current artists I liked, and I scoured that thing. THAT is a totally worthless experience, IMVHO.

      Subscription sites are designed for your average 13 year-old girl and here semi-rich, upper-middle-class parents. If she’s bad, you take away her top 40 garbage for a month.

    11. Reginald W says:

      To me, the music companies WANT subscription services, because the way I see it, the music companies MANAGE music, and only the sales of music goes to the artist, or their portion anyway and maybe a small amount of “listened to” music revenue. On a rental, the music companies get to juggle the books, which they seem to do quite well, so they get to keep the money/most of the money, rather than pass it on to the artist.

      In radio, they have to keep track of all the music they play, thus there are royalty rights that might accrue some revenue to the artist. When you get to download however much music, who knows what you play? Only you, and you likely don’t care to report it to the music companies. So, since they can’t say if it was U2 or Wayne Newton that you listened to, they take 90% and put 10% into a pot for their artists and claim it works out. Or whatever numbers. I don’t know and am only putting up numbers that seem logical to me about the greedy music companies that everyone talks about. 🙂

      I have no MP3 player of any sort, don’t listen to a lot of music, have a few CD’s here and there and have my own preferences to music listening. I have not downloaded any MP3 music and don’t feel I need to. My opinions are my own, whether you agree with them or not. No animals were abused or eaten while I wrote this reply. Your mileage/kilometerage may vary. 🙂

    12. James Bailey says:

      I’ve talked to many people about the iPod and buying music. Most people that buy music online do it very casually. One or two songs on a very infrequent basis. Most people already have the music they want to listen to. And as people get older, the need for newer music seems to drop off dramatically. Of course this isn’t true for everyone but it seems to be a general trend.

      I’ve met exactly one person who rents music. He was using Yahoo the last time I talked to him. He is a huge blues fan and wants to be able to listen to a large variety of different blues artists. He seemed very surprised to find out that almost no one else wants to rent music.

      I personally have about 4,000 tracks of music on my iTunes playlist. The vast majority is from CDs that I still have. I have an occasional album that I borrowed from a friend or family member and the rest is purchased from iTunes Store. I have no interest in renting music at all.

    13. Ivo Wiesner says:

      I am a composer myself, so I have a stake in this discussion.

      The only parties that could possibly have an interest in schemes that involve renting music are record companies and their lawyers. Why? Because, rather than delivering top quality products to their customers – i.e. uncompressed 16 or 24 bit audio, etched onto a solid disk – they’d like to get away with hooking people on the idea of renting sub-standard MP3 files, without ever allowing their customers to own them. How’s that for a business model? Reminds me of drug dealers, to be honest.

    14. In this perspective, the insertion of Mr. Enderle’s views is less than serious and shows little respect from TMNO toward us readers. Not that there is no market for music rental but please go to creditable sources and proven facts when searching support for this model, or any other for that matter.

      And yes, Enderle is entitled to his opinion, and to push others’ agenda (echoing Aaron). But I would expect TMNO to rise the bar when it comes to sources.

      Presenting someone’s opinion is definitely not endorsing it. As to what Aaron said, the person he referred to was on our other radio show twice. We gave him an opportunity to express his point of view.

      In saying that, the fact is that Enderle, sans his comments about people preferring subscriptions for musical downloads, actually made some good points, as I said previously. I’d rate him about two-thirds correct in his comments on the show. That’s not a bad average, but I agree some of what he says is rather out there.

      Peace,
      Gene

    15. turandota says:

      I’m sure that if customers clamored for it, they’d make it available.

      I don’t think so. People have been clamoring for OS X on PCs besides Apple, but they aren’t doing it, in fact they are taking steps to actively prevent it; Apple does what’s in its own interest, then maybe its customers.

      Apple already has a PR dept. Don’t be another one.

    16. Joe says:

      It seems to me that music “rental” is just one more way the music companies rape the artists. No sale, no royalties owed. The bookkeeping is so much simpler. They do not have to be verry creative to steal the royalties then.

    17. Mel S. Hutson says:

      Buying is dumb, renting is smart.

      I downloaded 3500 songs from Rhapsody – which really is not that large a collection – which costs me $10 a month as opposed to a $3500 flat payment now if I bought.

      If I bought $10 of songs a month (i.e. 10 songs) instead, it would take me 350 months or almost THREE DECADES to accrue all that music. By renting, I enjoy ALL of that music NOW with only a small monthly payment.

      It’s also not much compared to other bills, considering that I pay $40-50 a month for cable, an additional $40-50 for internet broadband service, $70 for cell phone, etc.

    18. Erica says:

      Thinking a bit futuristically, I imagine a world where–whether you’re home or on the road with a portable device– you can listen to nearly every song recorded and every movie ever made at the touch of a button. If that sounds farfetched, think again. I just entered the home music side of this equation with the Sonos system with Rhapsody and my jaw is still wide open.

      For those of you who haven’t seen one yet, the Sonos is a house wide system (expensive) which wirelessly plays all your digital and analog music all over your house controlled by a beautiful useable remote. It comes bundled with an optional monthly rental from Rhapsody, which I tried and loved immediately. It’s like the world’s biggest jukebox at my fingertips for $10 a month. Such an unbelievably good deal I can’t see why I’d ever want to buy music again.

      Except if I wanted to play it on an MP3 player. Because as some folks above pointed out, if you rent the music to download on your MP3 player and you stop subscribing it all goes away. That means all that hassle in choosing music, downloading it and setting up your player as you want it is all wasted effort. You’re starting from zero and your life is disrupted.

      But in the future this too will change. Wireless networks are available everywhere you go just like oxygen. The same functionality now available to high-end home users of the Sonos will be available from every MP3 player. At any time, without any advance planning, your portable device will allow you to choose from 2 billion songs on a whim. At that point, who cares if you ever own anything? If the service goes out of business, you sign up with another one. Most services will probably be able to import your ‘favorites’ list and recreate it so you barely even notice you switched.

      Erica

    19. hiutopor says:

      Hello

      Very interesting information! Thanks!

      G’night

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