subscription

Is Netflix's model a blueprint for digital music?

Netflix's subscription business model is an online video powerhouse, but would it work for music?

There's a sharp difference of opinion in the music sector about that right now. Billboard magazine started the debate Tuesday when veteran writer Glenn Peoples suggested that the major record labels might do well to emulate some of Netflix's practices. Ethan Kaplan, a former digital exec at Warner Music Group, later that day wrote on his blog, Blackrimglasses.com, that he's highly skeptical.

The discussion was sparked by Google and Apple's recent efforts to launch cloud music services. Both would enable users to store their music libraries on the companies' servers and then stream songs to users' Internet-connected devices. Google has talked to the labels about charging a fee for the service, according to previous reports. CNET reported on Monday that Apple has told the labels it too will charge.

These companies and the major labels are betting on subscription. They're doing this though the services that have attempted to prove the model in the past have a spotty record. Rhapsody, Yahoo Music, and the recycled Napster all failed to draw large audiences. Most players in the sector dream of having 1 million paying subscribers. Compare that with Netflix, which saw 3 million movie fans sign up for its service in the year's first three months. The company's U.S. subscribers now number 22.8 million, the same amount as Comcast. Helping to fuel that growth was Netflix's offer of $8 a month for unlimited streaming access to movies and TV shows.

"With Netflix consumers have proven they will rent content--even re-run(s)--and stream it from the cloud," Peoples wrote in Billboard. "They will pay for digital content they could get for free through illegal means. They will pay if the service allows streaming through multiple devices."

Peoples wrote that Netflix's low-cost, easy-to-use Web site, and nearly ubiquitous presence on Internet-enabled devices is a worthy blueprint for the music industry. But Kaplan said that Peoples' premise is flawed at its core. … Read more

Expect Apple to charge for music cloud

Don't expect Apple's cloud-music service to come free of charge, at least not forever.

Music industry insiders told me that Apple has indicated it could offer the service free of charge initially but that company will eventually require a fee. Google is also expected to charge for a similar service.

Billboard writer Ed Christman reported last September that Google was considering a plan to charge $25 a year for a subscription for its cloud service. Last month, the blog Wayne's World reported that Apple would charge $20 annually, but nobody I spoke with seems to know for sure what Apple may ask. An Apple spokesman did not respond to an interview request.

Both Apple and Google began discussing plans more than a year ago with the largest four recording companies about enabling users to upload their songs to the companies' servers. Music could then be streamed to users' songs via Internet-connected devices. This kind of third-party computing is known as the cloud.

It's going to be interesting to see how online music stores make their cloud-music offerings sweet enough to get consumers to pay--especially the early adopters (and if you're reading CNET that means you). Subscription services have yet to attract any significant market share in digital music. It's generally accepted that consumers prefer to own their tunes rather than renting them and there are some who suspect that the cloud is a way for the Web stores and the labels to charge consumers to access songs they already own. … Read more

Adobe Creative Suite 5: Why buy when you can rent?

While tablet fans slaver over iPad apps and creatives ideate over the new features in Creative Suite, I think investor relations folk will be the ones scrutinizing Adobe's adoption of a subscription plan for its Creative Suite products and what it might mean for Adobe's still-strong bottom line. (Never fear, though. You can still buy everything outright.)

I'll preface this discussion by saying I'm not a big fan of software rental, or really rental … Read more

Full digital access to NYT.com to cost $455

We'll soon see how much readers are willing to pay to access The New York Times online.

The country's leading general interest newspaper has finally unveiled its digital subscription plan, and the first thing that jumps out is that it's not cheap.

The Times said today that starting on March 28, U.S. readers who want access to NYT.com on every device, including smartphones and tablets, must pay $35 every four weeks, or $455 a year. The debut of the subscription offering launched in Canada today.

"Our decision to begin charging for digital access will … Read more

Did Google pull app for in-app purchase violation?

It seems that in-app purchase problems are starting to affect Google too. Reports surfaced Thursday that the company removed an app over a violation of "payment rules."

Earlier this week, Google notified one of its developers that the developers' free app, Visual VoiceMail, was being pulled from the Android Market. The reason given was that the app violated a section of Google's developer agreement that covers pricing and payments, according to a report on GigaOM.

While Google hasn't been clear about the exact violation, Jonathan Hollander of PhoneFusion, makers of Visual VoiceMail, believes the problem is … Read more

Report: Apple's subscription plan draws antitrust scrutiny

U.S. antitrust investigators are examining the terms Apple placed this week on publishers wishing to sell digital subscriptions through the App Store, according to a Wall Street Journal report that cited people familiar with the matter.

The Justice Department and Federal Trade Commission are interested in whether Apple is violating antitrust laws by routing customers through Apple's App Store and taking a 30 percent cut of each subscription, sources told the newspaper. Regulators' interest in the subscription terms is reportedly preliminary and might not lead to a formal investigation.

Representatives for Apple, the Justice Department, and the Federal … Read more

Rdio for iPhone gets a new look

Rdio, from the makers of Skype (Windows/Mac/iPhone), is a subscription-based music service offering more than 5 million songs as well as added social components that let you connect with friends to share and discover new music. Today, the service announced an updated version of its iPhone app that features an entirely redesigned interface and new options for song recommendations, popular music charts, and new releases. It also offers improved search tools and better syncing controls than previous versions.

Get started by downloading the free app, then sign up at the Rdio Web site for a 30-day free trial. … Read more

Google announces One Pass, rival to Apple's subscription service

The day after Apple officially shared details of its new App Store subscription plan, which lays the groundwork for Apple to take a 30-percent cut from publishers who sell content within their apps, Google announced the launch of Google One Pass, its online charging service for newspapers and magazines. Google's rival service offers two big differences from Apple's: content providers will get to keep 90 percent of revenue from One Pass sales and publishers will retain control of consumer data.

Outgoing Google CEO Eric Schmidt, who becomes Google's executive chairman in April, announced Google One Pass in … Read more

Rhapsody bites back at Apple

With Apple officially sharing the details of its new App Store subscription plan, which lays the groundwork for Apple to take a 30-percent cut from publishers who sell content within their apps, we were waiting for some reaction from content providers. Well, one, Rhapsody, has finally braved Apple's wrath and issued a statement saying Apple's new arrangement was "economically untenable." And while it didn't threaten legal action, it certainly hinted at it.

Here's the full statement from Rhapsody's President, Jon Irwin:

Rhapsody is the leading digital music subscription service in the U.S.,… Read more

Apple unveils subscription service in App Store

Apple launched a subscription service at the App Store for magazines, newspapers, videos, and music bought through its App Store.

In a move that goes a long way to addressing concerns of many in the magazine and newspaper sectors, Apple said today that publishers will be allowed to set the price and the length of the subscription term. The processing of payments will be Apple's job and handled within the App Store. Apple will collect 30 percent of the revenue.

"Our philosophy is simple," Steve Jobs wrote in a statement. "When Apple brings a new subscriber … Read more