Subscription Model Killing iTunes? Yawn.

With yellow bottle caps making their way across the country and fairly awful SuperBowl ads showing up online it’s easy to think that iTunes is nigh unstoppable. In fact, with 70% of the market and over 250 million songs sold it is hard to argue otherwise. Still there are a group of folks that honestly believe the marginalization of iTunes is just around the corner.

This is not an entirely new phenomenon. When a competitor rolled out their Tommy Lee ads and cut rate pricing many folks assumed that iTunes was going to get hammered. When Wal-Mart started offering cheaper downloads plenty of industry observers thought that people would opt for Wal-Mart’s catalogue even if the process were as unpleasant as going to an actual Wal-Mart. In fact the number of companies that have tried to take a chunk of digital music downloads away from iTunes and failed has more than a few recognizable names. A great example is Sony. Got the big name, did the cross promotion with McDonalds and then�flopped. Of course all these places were attempting to do exactly the same thing as Apple: sell songs one at a time for reasonable price. Therefore it is small wonder that these efforts failed to gain any real traction, you don’t gain market share by “me tooing” already happy customers.

This time, the industry is sure, the outcome will be different. Instead of going the “me too” route they are coming armed with a subscription model (cue scary music). The idea being that you pay a monthly fee and get to listen to unlimited music of your choosing. You can immediately see the appeal to the people selling the subscriptions: a steady monthly income and low maintenance clients. There is also, so the industry would have you believe, a huge benefit to consumers. That benefit, as previously mentioned, is being able to download all the music your bandwidth can handle for one monthly fee. When the subscription model really gets rolling presumably you’ll be able to play the songs on your digital music players and perform a variety of other useful machinations with your rented music.

I’ll admit this has some allure. Imagine you’re half drunk in front of your computer one bleary Friday evening and decide you want The Complete U2. You blearily hit the “buy album” button in iTunes and awake the next morning to find that the inside of your mouth tastes like something you’d put rubber gloves on to touch and that you’re $150 poorer. On the bright side you do own a whole bunch of decidedly average pop music. With the subscription based model you wouldn’t have that worry. Any drunken downloads don’t add to the cost of the service, you just keep paying your monthly fee and everything stays the same. The other tidbit the industry types like to point out is the cost issue. The will earnestly tell you that it will cost $5,000 to fill your 20GB with legally downloaded music from iTunes whereas a for a small monthly fee they’ll keep your device full.

For all the supposed virtues and money savings to be had by going with a subscription I don’t think iTunes will suffer too badly once the subscription model matures. First off you have the monthly obligation. Sure it won’t bother a lot of people but one more bill is something I can do without. More importantly you don’t own the music. That means if times become tight and you stop paying for the subscription the music stops playing, you only keep the fond memories. But the biggest thing that is going to hold the subscription service back is iPod compatibility. None of the places running headlong towards the subscription model plays with the iPod and if you’re product isn’t iPod compatible you’re subscriptions are going to be next to useless to anyone who owns an iPod and the iPod, it hardly needs to be noted, is the biggest market out there. Oh, and the $5,000 dollar price tag to fill up your digital music player? Perhaps the subscription pushers should remember that most people already have a fairly substantial music collection on things called CDs. Turns out with a little effort you can store those things on your iPod so you don’t have to re purchase every piece of music you’ve ever owned. So yet another iTunes killer will come and go probably without too much fanfare or notice. On the bright side it will be interesting to see what they come up with next time.