By Jo Best, 2 December 2004 14:50
NEWS While renting entertainment is more often associated with going down to the video shop, if online song sellers have their way, we could all be paying to rent our digital music - and 'give it back' when we get bored of the service.
Per download models, such as iTunes' 79p per track model, could be for the chop, while subscription services, such as Napster's £9.95 per month 'all-you-can-eat' offering, could be the way forward for online music.
While the idea of renting music might be strange, it's a more popular one with the operators because it brings in a higher return: typically, per download models bring in a matter of pence for the operator.
However, despite the fact that when a music fan lets a music subscription lapse they lose access to all the tunes they used to access via that particular service - which doesn't happen with a per download model - subscriptions are gaining momentum, according to analyst house JupiterResearch.
JupiterResearch found that while 16 per cent of online adults in the US wanted a 99 cent single download, 17 per cent were interested in a subscription.
However, subscription sellers might end up doing it for the kids. The research found that nearly a third of young adults - 18-24 years old - would consider a subscription service and 19 per cent of teens aged 13 to 17 would be happy to rent their music.
A report from fellow analyst house Informa Media still sees problems in the subscription model, predicting that if the idea of renting music from a supplier is to take off, retailers will have to alter the mindsets of their customers.
"However, doubts and questions about the viability of subscription services remain... The current raft of subscription download services on offer require subscribers to remain loyal to the service as downloads that have not been purchased separately cease to be accessible once a subscription lapses. This clearly contrasts with the long-established traditions of music buying," the report said.
Comments
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1. AM
We'll Jo, its January, 2005 - your article dated December 05, 2004 - and Apple has sold $250 MILLION songs. According to one calculation - assuming the current rate of selling - Apple by itself will have 5% of all music sales by 2007!
Subscription - dont make me laugh! - I'm in Switzerland and I'm goint to RENT something from an American company that might go bust or be sold tomorrow! I'll BUY my music - thank you.
Apple has 72% of all legal online music share - thats where the majority are continuing to buy. I dont own Apple shares - but stop bashing the little company that COULD!
2. Tim
In this article the statistics are as usual completely useless. We are not shown the results complete or the options given in the survey without which we can't draw any conclusion.
17% were interested in a subscription, but at what cost? If I were offered a month subscription to a service which offered at least as much choice of music as iTunes for 99 cents then I'd go for it. How many companies are offering that?
Surveys of this nature that I have seen before typically offer people options of varying prices for both subscriptions and single tracks ranging from far cheaper than anyone is offering to twice as expensive as average.
Without mention of a cost of subscription for those 17% I can only assume the reporter added up the results from all the subscription options and displayed them next to the statistic for 99 cent downloads. Possibly the statistics for the 99 cents and greater added together if they weren't completely brain dead.
Either way if you can't publish the full set of results from what appears to be a paid access report then at least list two statistics that are actually sensibly comparable.