Subscription Small Print

Tuesday, 8 February 2005

I thought this was obvious, but, judging by my email, there seems to be a fair amount of confusion regarding the way subscription-based music services such as Napster To Go work. What many people seem to be missing is this:

If you drop your subscription, all of the music you’ve downloaded ceases to function.

In other words, with a subscription service, you’re renting music, not buying it. So, for example, you could join Napster To Go tomorrow, pay $180 to maintain your subscription during the next year, and during that time, download tens of thousands of music tracks. But if you cancel your subscription next year, all of that music will stop working. It will stop working on your computer, and it will stop working on your little Napster-compatible portable player. (And thus even while you are subscribed, you need to frequently re-sync your player to your network-connected PC, even if you haven’t downloaded more music, just so your player’s DRM software can check the status of your subscription.)

Now, still, there is a case to be made for the subscription model. I mean, you do get access to tens of thousands of songs while you maintain your subscription. But there’s no free lunch. Napster’s “Do the math” campaign plays up the dual points of unlimited downloads and only paying $15 per month:

You can fill and refill any Napster To Go-compatible players for about the price of a CD a month.^*

Look at the bottom of the page to follow the footnote, however, and you see the kicker:

^* It is necessary to maintain a Napster subscription in order to continue access to songs downloaded through the Napster service.

And if you want to use your music in a non-DRM context, like by creating a standard audio CD, you still need to pay $.99 per track, which is in addition to your regular subscription fees. The music you download via subscription can only be used in a DRM context.

How Much Do People Spend on Music?

In one of my questions to the all-seeing 8-Ball, I wrote:

But, still, the basic math indicates that most iPod owners are spending well under $100 per year at the iTMS, far less than the $180 annual cost of a Napster To Go subscription.

Many of you objected, claiming that many people spend way more than $100 per year on music. But that doesn’t contradict what I wrote. I’m only saying that the vast majority of iPod owners are spending under $100 per year on iTMS downloads, not under $100 per year on music, period.

In fact, I suspect there are a lot of people who use iTMS the way I do: I buy singles online, but when I buy albums, I buy CDs. I.e. I use iTMS in addition to buying CDs, not instead of. That may change someday, especially if iTMS were to begin selling tracks encoded with the Apple Lossless compression scheme; but for now, it’s something I use for impulse purchases, not collecting.

I think $180 per year is just way more than most people are willing to spend for rented music downloads, regardless how many songs they can download. Napster already has over 200,000 subscribers to their existing plans (which plans cost less than $15 per month, but don’t allow you to transfer your downloads to a portable player), but Apple is selling around 200,000 iPods per week.

The other point I’ll mention is that most of us over the age of, say, 25 or so, already own most of the music we’re ever going to want. Not all of the music, but most. I’ve bought more music on CDs in the past than I’m going to buy in the future. I know people who own so many CDs they can’t fit their entire libraries on a 40 GB iPod.

These are people who pretty much blew a big chunk of their income during college on CDs. Even if you only shopped at used-CD stores, a 500-disc collection would set you back a couple thousand dollars. It’s no joke to claim that many of my friends during college had their net worth, such that it was, tied up in their CD collections.

Fast-forward to today, and those of us with CD collections don’t need to spend any money at all to repurchase the music we listened to 10 years ago, because we still own it. Whereas a kid today who puts his money into a subscription service like Napster To Go is going to wind up spending a couple of thousand dollars over the next decade, and yet own nothing.