Technology: Apple's evolving stance on subscriptions
Apple's Steve Jobs has said repeatedly that he thinks consumers want to buy music, not rent it. That's why his company hasn't followed the likes of Microsoft, Yahoo and RealNetworks into the market for music subscriptions, where people pay a flat monthly fee for unlimited access to songs they can play but not keep.
Nevertheless, Apple took two steps in the last few weeks that could be a real boon to such subscription services as Napster, Rhapsody, MOG, Slacker and Rdio. The first was launching iCloud, which lets people store a copy of their music collection (along with pictures and documents) online. The second was dropping a proposed rule for apps that would have made it all but impossible for subscription services to maintain their iPhone apps.
Some analysts predicted that iCloud would be a death blow for Napster et al because it enabled people to access high-fidelity copies of all their songs via the Net from multiple devices for a little more than $2 a month. That's a bargain-basement price when compared to other services, which cost $10 a month for mobile access to an online jukebox.
But the thing about iCloud is that users don't get much for their $25 a year. For starters, they can play only the songs they own (legally or not -- iCloud doesn't distinguish between tracks bought at iTunes and those downloaded through a file-sharing network). The real value in the more expensive subscriptions is their ever-increasing inventory of songs, both new releases and long-forgotten older ones, and the help they provide in discovering the ones that fit your tastes and your mood.
In addition, once people make the iCloud-assisted shift from carrying their songs around with them to accessing them from a locker online, they've cleared the intellectual hurdle that blocks many people from subscribing to a service like Rhapsody. After all, if you're willing to pay for access to your music through iCloud, why not pay for access to the largest possible collection?
Apple's shift on apps was even more important to subscription services. The company told developers earlier this year that if their iPhone or iPad app was tied to a subscription -- for a newspaper, say, or a music service -- they had to allow users to subscribe or renew through the app at the same price they could do so anywhere else online. Because Apple takes a 30% cut of in-app sales, that requirement would have been a huge blow to services that operate on thin margins. Rhapsody, for one, cried foul, saying it couldn't afford to continue offering an iPhone app under those rules.
The company is now saying that developers don't have to sell subscriptions through Apple's app store, and if they do, they can set whatever price they choose. The change eliminates a policy that not only threatened the music services that were competing with iTunes but that made Apple's mobile platform less attractive to subscription services in general. Given the intense competition between Apple and Google, it doesn't make sense for Apple to make iOS less attractive to service providers than Android.
-- Jon Healey