Because I was highly involved in the online content subscription business of Ancestry.com in the late 90s and early 00s, I thought I was pretty smart. When Apple jumped into the music industry with its iPod and iTunes service, I thought they were pretty smart, but I also thought that everyone else ganging up on Apple would cause a big dent in its music business, and that eventually the iPod would go the way of the Mac, and end up with a relatively small market share. I especially thought Steve Jobs was wrong when he said customers wanted to own their own music and not rent it. How could a pay-per-download model ever compete with an all-you-can-eat subscription model that would give me everything I ever wanted for a low monthly fee?
I had a Rio mp3 player back in 1999 or 2000, so I had a little experience with mobile music. But I had a lot of experience with online genealogy where basically every customer wanted unlimited access to everything. The subscription model worked great with genealogy. Every day we added new data. Every day customers had more content to search through to find their ancestors. I believed all-you-could-eat subscriptions were the way to go. I assumed this would be true in the music industry as well.
So I bought my first iPod, a 20GB version about 3 years ago, and I had lots of trouble with it. The battery went bad pretty soon. I had trouble with synchronization. And many of the audio books I bought on Audible were downloaded in a format that didn’t seem Apple friendly. I was pretty unhappy.
Later, I bought a Creative Zen, a 30GB, I think, and decided to try Yahoo Music, an unlimited music subscription service that launched with a great introductory offer of $6.95 per month. I was sure that a non-Apple player combined with an all-you-can-eat non-Apple music service would be much better than the Apple approach.
But the Yahoo Music service was not compatible with my Zen. I think I paid Yahoo for 3-4 months before getting around to cancelling the service. So then I turned to Buy.com, with its BuyMusic.com web site, and I started buying tunes there. But a lot of songs I wanted I couldn’t find there. And I had some difficulties getting the music onto my Zen. The music management software I was using was actually not that great.
Finally, a month or so ago, I decided it was time to try an iPod again, and this time it would be a video iPod. I needed to get some of the 10Speed Media video productions on a video iPod so I could show the work to potential customers. I also wanted to get tons of LDSAudio.com and mp3books.com content onto an iPod and start demonstrating the power of LDS audio and video clips to employees and customers of our LDS Media company.
So I bought a 60GB video iPod. I started using iTunes, which now has excellent synchronization, a way bigger supply of music than anyone else, a great podcast directory, and it’s easy to get videos onto my iPod as well.
More than anything, I have come to believe that Steve Jobs was absolutely right. People want to own their music. They don’t want to rent it. There are probably only a few hundred songs that I’ll ever want on my iPod. I have my running music, my easy listening music, and I want to listen to tons of podcasts and audio books. But music? Just my favorites. And I’d love to own them, thank you very much.
I have decided that the concept of an all-you-can-eat music subscription is really not that great of an idea for most people. We have the songs we love and we might occasionally start liking a new one. But paying $14.95 per month to try out lots of new songs? No thanks. I just want my favorite music, mainly songs from the 80s. I like to listen to the same stuff over and over and over again. Give me Earth, Wind and Fire’s “In the Stone” and Gloria Estefan’s “Turn the Beat Around” every time I run. I need those songs. I don’t want to sample new music when I exercise.
But with other types of content, like audio books and video, anything educational, I want variety. I almost never want to see the same movie twice. So I would want an all-you-can-eat subscription model there. With audio, I want to hear lectures from new conferences or from universities every month–different ones every time. So I want an unlimited subscription there, with new content being added regularly.
But Steve Jobs was absolutely right about the music. I do want to own it.
And now he owns me.
I am now an Apple iPod and iTunes fanatic. Apple has nailed it. From the awesome out of the box experience in opening the iPod to the feel of it in your hand, to the amazing video display, and the simple earphones that don’t have ear buds that keep falling off, to the incredible iTunes selection for music, podcasts, and video — the whole experience is phenomenal.
So it’s no wonder that consumer surveys show that Jobs was right and that consumers want to own their music..
Here are some interesting stats: 20% of Americans now own an mp3 player, up from 15% last year. 54% of teens do. But only 25% of mp3 users buy songs from a download service. Mostly they rip tunes from their own CD collection (since they already bought the music once.)
So Jobs wins round one handily in the digital music wars. But he still has challengers on all sides, and the biggest potential challenges (based on all the hype and investment and TV ads) might be the mobile phone companies. A few months back I read that more than 950 million devices capable of playing mp3 music would be shipped in 2009 alone, and that most of those devices would be cell phones.
So how will Apple handle the challenge from mobile phones? Many people are speculating that an Apple iPhone is in the works.
Wikipedia has an amazingly comprehensive article on iPod (compare it to Britannica’s content on iPod in case you are skeptical of Wikipedia. Okay, to be fair, we can’t access Britannica’s premium content, but can you imagine them having a better article on iPod than Wikipedia? No way. Wikipedia gets updated regularly, whenever Apple makes a new announcement or has new sales figures or new models. Wikipedia rocks.)
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