The Unrepentant Individual

...just hanging around until Dec 21, 2012

May 26, 2005

Music Downloads

A couple weeks ago, Yahoo! announced “Yahoo! Music Unlimited”.

That day, stock prices for Napster and Real Networks were sent tumbling, 20 to 30%. Apple also took at small hit on the market. Presumably, Wall Street thought that Yahoo’s extremely low price was going to impact the other players.

Apple’s iTunes is still the big boy on the block, thanks to Mad Dog Steve Jobs. Napster thought they had the answer with unlimited music downloads for $15 per month (remember their launch with the crappy Super Bowl ads?). Napster’s idea was to get people to pay $15/month and they would have access to any of the music that Napster had. But as soon as you let the subscription expire, all the songs were rendered unplayable. It seemed like a good concept, except a bit pricey.

Along comes internet Gorilla Yahoo with their bottomless pockets. Could they take this concept and make it work at a substantially lower price point? Their offering was access to their music database for $60 per year. Sounds pretty tempting. Other services like Napster say it can’t be sustained and it is just a gimmick. But even if they are losing money, Yahoo can hold out for a long time with all the money they have pouring in.

I have had conversations with several people about the subscription service concept. Personally, I think it works. You pay a monthly fee and get access to Yahoo’s music database from anywhere you can access the inter-web (shout-out to Principal Scudworth). Granted, you don’t actually OWN the music, you are simply renting it. But you can keep it on your hard drive and load them on your MP3 player. What else would you want to do with them? If you insist on actually owning the rights to the song, you pay $.79 for it. Not bad.

For some reason, people get caught up in the “I don’t own it” mentality. But as long as you keep up to date on your Yahoo subscription and update the file licenses each month, there’s nothing to worry about. To me, who buys maybe 5-10 CD’s per year, this type of offering makes sense. For less than what I have been spending on CD’s each year, I can have access to substantially more music. Now, if I let my subscription expire I think I’m screwed. But that’s the price you pay to have unlimited downloads for the price of 4 CD’s.

Am I going to sign up?

Not sure. I am more tempted to give the MyFi from XM Radio a whirl. Unrepentant has one and he loves the little gadget. But for those iPod users…wait…forgot to mention…Yahoo Music Unlimited doesn’t work with iPods…HA!. But for those MP3 players that have 20 GB drives, the Yahoo service makes perfect sense. A 20 GB library for the price of a dinner for 2.

Posted By: Wilson @ 8:24 pm || Permalink || Comments (4) || Trackback URL || Categories: Uncategorized


  1. There’s a few big problems. First, any subscription cost is a fixed cost. Anyone who cannot afford that fixed cost is locked out. That doesn’t seem to be a problem for you, but it’s an obstacle to the service achieving any measure of success (which is important for reasons I’ll get to).

    Secondly, even if you can afford that fixed cost, you’re locked out as soon as you stop using the service (except for the songs you’ve bought).

    Thirdly, selling music online under any business model is not a lucrative business. Apple uses iTunes as a loss leader for the iPod. These other companies, Yahoo in particular, have nothing that they can use their stores as loss leaders for. This is important because there’s a particularly high chance that a music service will be discontinued. If that happens, you have absolutely nothing to show for the subscription you’ve been paying for so long.

    Fourth, there’s a very good reason that the iPod is the best-selling music player out there. It’s the most usable and reliable of the bunch with a competitive price across the board.

    Incidentally, Apple’s in a particularly good position. If the subscription services catch on for some reason, Apple has enough of a lead in market share to just roll out a subscription service of their own and regain their dominance.

    Comment by Phil Welch — May 26, 2005 @ 10:17 pm
  2. Brad, TF and Bonnie both own I-Pods. Bonnie got hers first and TF fell in love with it. Bonnie just bought a set of traveling speakers for hers on EBay and she happy as a lark. As much as Bonnie travels, she doesn’t leave home without it. TF has his transmitter that he uses when he is in his truck and it transmits from a certain radio station. TF has the 40gig. Ipod and it will hold anything he ever wants to put on it. When he got it he downloaded every CD we own onto the computer and then downloaded it onto his I-pod. He has books on tape and his scriptures on there. He has only purchased 3 or 4 songs from I-Tunes so his expense has been very small, except for the original price of the I-pod. TF still likes listening to his music from the CD’s when he is home and uses his Ipod when he is working or traveling. He’s also been know to fall asleep listening to the Ipod at times.

    Comment by Lucy Stern — May 26, 2005 @ 11:00 pm
  3. Phil,
    I say that anyone who can afford to buy a 20 GB portable MP3 player, and has a high-speed connection to download songs (which you’ll pretty much need) also has the ability to cover $5/month for songs.

    I agree with Wilson, that I’d much rather have a small $5 subscription. The reason I’ve always shyed away from an MP3 player is that I don’t want to spend 99 cents a song, because they way I’d download music I’d either never use it or be spending $30/month to keep up with current songs. And most songs I’d ever want to download I’d get tired of after a few months, so paying for them individually doesn’t make much sense to me.

    But then again, as Wilson said, I’m an XM fanatic. I’ve got the SkyFi in my truck, and recently got the portable MyFi. We use that on travel, in my wife’s car, etc. For both of them it costs me about $20/month, but it’s worth it. I can’t stand normal radio anymore.

    Comment by Brad Warbiany — May 27, 2005 @ 7:41 am
  4. Well, that’s just the thing. You don’t even need to buy an iPod (even though the cheapest iPod is the $50 iPod shuffle) to buy at iTunes. The tracks you buy at iTunes you can burn onto a CD or play from your computer, and with the right device (Apple’s AirPort Express) you can even hook iTunes up to your home stereo system wirelessly.

    Of course, I still know people who swear by buying used CD’s, and that’s still one of the better options.

    Comment by Phil Welch — May 27, 2005 @ 1:12 pm

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