Universal Takes Aim at iTunes; Can "Free" Music Work?
It looks like the music industry may beat European regulators to the punch in loosening Apple's grip on the digital music market.
In an agressive twist on Apple's model of making their bucks off iPods rather than 99-cent iTunes tracks, Universal Music will launch a new music subscription service, dubbed Total Music, which could be "free".
From PC World's news report:
The plan is to get hardware makers to absorb the cost of a $5 monthly subscription, so that consumers would get their music essentially for free when they buy a new player, and the hardware industry would be compensated by selling many more devices.
"You know that [the subsctiption is] there, and it costs something," one tech executive who has seen Universal's presentation told BusinessWeek.com. "But you never write a check for it."
Microsoft is one lead candidate to take up the fight with Universal and revive its Zune music player in the process.
But the wireless carriers are the most adept at bundling devices and services under a contract to keep the "free" feeling alive. I'd expect fierce fighting by wireless companies for deals with Universal.
While Universal is currently running DRM-free music trials on iTunes rivals, it is not said if Total Music would be DRM-free. But removing DRM from the digital music landscape could be the the next big cause, giving a competitive advantage to its champion.
Explaining how a move to Linux was not in the cards for me just yet, I was describing to a friend today how I ended up with a smorgasbord of DRM to deal with after owning a Mac for a while (Read: iTunes) and at times shopping around for music deals on a PC and snagging some $6.99 albums from Real Networks (Real). I thought of going with Windows Media at one point when running Vista x64 exclusively because Real's Helix would not run. Sure, a mess. But probably all too common.
But DRM-free wishes aside, let's not forget brute music industry muscle in reshaping the digital music landscape. BusinessWeek.com reported that Universal had already enlisted Sony BMG Music Entertainment and was talking to Warner Music Group for its plan. Together the three would control about 75 per cent of the music sold in the U.S., the report said.
If they can agree on how to unseat Apple, we all win. Let's hope the digital music landscape is changed forever. Talk back to me below.
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So hardware would absorb the cost of a $5 PER month fee?
So a Zune would cost me $5 x avg lifespan of unit, say 24 months?
So an additional $120 plus tax???
And this fee gets added to my cell phone bill too since it has an MP3 player that I dont use? And there is no way to opt out since i pay upfront?
Screw that!!
This is just another try to milk the public. Rather than make it optional, like itunes does, they make it a requirement when you buy a player or phone. Nope, not gonna work. If they want to see a REAL competitor to itunes, the new Amazon model is a real competitor. 89 cents fr 256 compared to apple's 1.29. Thats competition. Forcing things on people like Universal is trying to do, is just garbage, and adding to the costs for everyone. They are trying to put a tax on digital devices!!
This is just another try to milk the public. Rather than make it optional, like itunes does, they make it a requirement when you buy a player or phone. Nope, not gonna work. If they want to see a REAL competitor to itunes, the new Amazon model is a real competitor. 89 cents for 256 compared to apple's 1.29. Thats competition. Forcing things on people like Universal is trying to do, is just garbage, and adding to the costs for everyone. They are trying to put a tax on digital devices!!
Why is it necessary to "unseat" Apple, a wasteful and costly enterprise? There is no single solution that works for everyone. Why not try to influence Apple, Amazon and other providers to create the most flexible systems so that the most number of options are available to the most number of people. Then we all win.
Almost all the new music is horrible. The music industry has done that to themselves. I go out and find free music from unsigned bands like The Pillbugs because I'm tired of crap like Britney Spears. I don't think half of the famous music stars could make it past the second round of American idol. So I would be totally against the bundling. I already have had to buy my music collection three times through record (best sounding), cassette, and CD (SACD,DVD_A). If they had something to sell me but music stinks today. They put it all into Rap or fake country (it's rock). Jazz blues and rock are ignored.
I don't think the above posters read "The plan is to get hardware makers to absorb the cost of a $5 monthly subscription" the right way here.
They aren't jacking up the prices upfront to compensate for the subscriptions, the actual people who are MAKING the devices pay for the subscriptions by giving the consumers essentially free music via the device.
So say, Microsoft pays $5/month for every zune they sell to give the buyer free music downloads for it. More people are going to be buying zunes as a result of this free music.
Universal makes money through the subscriptions Microsoft is paying for, and Microsoft makes more money through the increased number of zunes they sell.
Sounds like a win win win situation to me, [+$] for Microsoft [+$] for Universal [-$] for Apple. =]
> I don't think the above posters read "The plan is to get
> hardware makers to absorb the cost of a $5 monthly
> subscription" the right way here.
bens0n, I think they actually understand the situation better than you. Don't be fooled by the phrase 'absorb the cost'.
First, that's NOT the way that the free market works. The manufacturers WILL pass on the cost to the end users. This is only 'free' in the same sense that utilities are 'free' when you rent, and your landlord pays them. Their not your mom, they'll both pass on their costs in the form of higher prices.
Second, the manufacturers can't afford to NOT pass on the costs, they'll go broke! Last time I heard, the average markup for something was 30%, that means if you buy a $200 player, they're making about $60. If they assume ONLY a 12 month lifespan for the player, that eats up the ENTIRE profit! 5*12=60
And I bet they'll claim AT LEAST a 3-year lifespan: an extra $180 per player. 5 years would add $250.
bens0n haven't you learned that there is no such thing as a free lunch. Oh, we will pay. It's not for me. I will stick with iTunes and Amazon.
Let me see if I've got this right. Universal, Sony, EMI, Warners and the rest of gang are going to band together to sell downloads via a new site to be called Total Music.
And (this is the bit that I'm having trouble with) it's NOT a cartel.
I just cannot understand these companies.
Specifically, how they think we will put up with DRM or any form of restrictions on what we can do with music we have purchased.
Amazon seems to be the only large player in this space offering value to their customers. Amazon, offers high quality audio (256kbits VBR MP3) with no DRM.
Tracks are like .89 each.
For those who have not yet seen it, here is a direct link to their new music offering.
Sorry, forgot the link:
http://www.amazon.com/b/ref=sa_menu_dmusic2/102-0572457-7145764?ie=UTF8&node=163856011&tag=opensounds-20&linkCode=ur2&camp=1789&creative=9325
RIAA music on a Zune. No thanks.