First Click: Remember when Steve Jobs said even Jesus couldn’t sell music subscriptions?

June 8th, 2015


Apple is widely expected to announce an on-demand subscription music service today at WWDC costing $10 a month. The announcement will mark a profound transformation from where Apple began when it introduced the iTunes Music Store on April 28th, 2003. The “revolutionary online music store” launched with 200,000 tracks priced at $0.99 from all of the “big five" labels. It was positioned as an alternative to illegal file sharing sites like Kazaa, and legal subscription services like Pressplay and Rhapsody. Let’s reminisce with this lovely Steve Jobs quote from the event:

"These services treat you like a criminal. And they are subscription based and we think subscriptions are the wrong path. One of the reasons we think this is because people bought their music for as long as we can remember. We bought our music on LPs, we bought our music on cassettes, we bought our music on CDs. And we think people want to buy their music on the internet by buying downloads just like they bought LPs, just like they bought cassettes, just like they bought CDs. They’re used to buying their music, and they’re used to getting a broad set of rights with it. When you own your music it never goes away. When you own your music you have a broad set of personal use rights — you can listen to it however you want."

Subscriptions steve jobs

"People have told us over and over and over again, they don’t want to rent their music," said Jobs emphatically at an event later that same year. "Just to make that perfectly clear, music’s not like a video. Your favorite movie you might watch ten times in your life — your favorite song you’re going to listen to a thousand times in your life. If it costs you $10 a month or over a $100 a year for a subscription fee to rent that song, that means for me to listen to my favorite song in 10 years I paid over a $1,000 in subscription fees to listen to my favorite song ten years from now, and that just doesn’t fly with customers. They don’t want subscriptions."

He was right of course, at the time — when the iPod was king — people didn't want to rent their music. But a lot has changed in 12 years including the proliferation of smartphones, the rise of Sonos and its ilk, and the shifting ideas of ownership in the sharing economy. The one thing that's remained consistent, however, is the difficulty of turning a subscription music service into a profitable business that doesn't rip off the artists. Even the Son of God would have a tough go of it according to this classic 2003 Jobs quote given to Rolling Stone:

"The subscription model of buying music is bankrupt. I think you could make available the Second Coming in a subscription model and it might not be successful."

Spotify, the world’s largest music subscription service earned $1.22 billion in revenue on 15 million subscribers last year yet still posted an operating loss of $183 million. Still, Sony Music CEO Doug Morris thinks the second coming of iTunes has a shot at pushing the industry past the "tipping point" to its pre-Napster riches. But it won't be easy. In the immortal words of Hunter S. Thompson:

"The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs.

There’s also a negative side."

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Jobs of the day