The headlines scream: “Universal Music Takes on iTunes,” and all I can think is “what, again?” Don’t they do that, like, every other week?
This time, I am told, it will be different. This time, Universal Music Chief Doug Morris is talking about launching a subscription model — reportedly called “Total Music” — that will essentially be FREE to the consumers. Which doesn’t at all sound like a combination of Napster 2.0 and Spiral Frog. Nope.
I will admit, there is what seems to be a twist:
While the details are in flux, insiders say Morris & Co. have an intriguing business model: get hardware makers or cell carriers to absorb the cost of a roughly $5-per-month subscription fee so consumers get a device with all-you-can-eat music that’s essentially free. Music companies would collect the subscription fee, while hardware makers theoretically would move many more players.
Right. They seem to be missing a whole bunch of points here. First off, the only way that this might sell more devices is that if the “all-you-can-eat” music devices have some kind of DRM that ties the music to the device.
So already, I’m out. Because as I’ve argued before, while that might be FREE!!, it certainly ain’t free. Not when you can’t listen to a song anywhere at any time.
Then there is this:
With the Total Music service, Morris and his allies are trying to hit reset on how digital music is consumed. In essence, Morris & Co. are telling consumers that music is a utility to which they are entitled, like water or gas. Buy one of the Total Music devices, and you’ve got it all. Ironically, the plan takes Jobs’ basic strategy– getting people to pay a few hundred bucks for a music player but a measly 99 cents for the music that gives it value–and pushes it to its extreme.
I believe that there is a false assumption here: that the music purchased from iTunes gives the value to the iPod. Wrong. Wrong. Wrong. If the iPod only played music purchased from iTunes, it would have never become the all-consuming monster that it is.
Let me do the math: last month, according to Apple, they’d sold 110 million iPods since its introduction. In July, they announced that they’d sold their 3 billionth song.
Both are impressive numbers, but if you divide the number of downloads by the number of iPods, you get a little bit over 27 iTunes downloads per iPod. For a device that came out of the gate touting a capacity of 1,000 songs, that’s nothing — less than 3% — so obviously very very little value of the iPod is derived from the tie-in to iTunes.
The big question is whether the makers of music players and phones can charge enough to cover the cost of baking in the subscription. Under one scenario industry insiders figure the cost per player would amount to about $90. They arrived at that number by assuming people hang on to a music player or phone for 18 months before upgrading. Eighteen times a $5 subscription fee equals $90.
I have to ask, who is going to absorb this $90 extor– er, subscription fee? The hardware manufacturers? How is it possibly in their best interests? Because sales will go up? Why will sales go up again? Because that specific device will get FREE music that no other device will get? Except for most of the other devices?
Or will they pass this cost on to us?
And why would Apple, who makes, you know — the iPod — possibly do this? How is it in their best interest? And how is it in the best interest of the other hardware manufacturers to put an artificial increase on either their manufacturing costs or their sales costs to deal with something that isn’t their goddammed problem in the first place?
It’s amazing that they are still trying to control something that they let out of their grasp over a decade ago.
Here’s an idea, Universal. Let it go. Stop fighting a battle that you’ve lost. Forget all of this convoluted “Total Music” stuff, and continue down the path of making your music available cheaply — and DRM-Free — and concentrate on, you know, releasing better music. You’re still fighting the wrong battles.
Oh, and that new Radiohead album that I bought directly from the band itself last week? Fabulous!