The December 13th issue of Rolling Stone reports on the promise of a subscription based business model as the future of the music industry. The idea of paying a monthly fee for unlimited access to a catalogue of music is becoming increasingly popular, and record labels are making moves to adapt. Jointly, Universal Music Group, Sony BMG, and perhaps Warner Music are planning a service called “Total Music,” where manufacturers of MP3 players, advertisements, and Internet service providers would cover subscription costs (1). With Universal Music Group’s July decision not to renew their contract with iTunes (2), as well as their recent subscription service deal with Nokia: offering customers unlimited access to their catalogue for one year (3), it looks as if these combined decisions could additionally shake up Apple’s hold on the digital music market.
Pricing is the main issue threatening the subscription model’s success. Record labels charge subscription services a certain amount, as well as taking a share of the overall income. This factor ultimately affects the price that the consumer has to pay, and the likelihood that he or she will subscribe. Napster, Rhapsody, and Microsoft’s Zune Pass all charge around $15.00 a month (4). Rolling Stone provides a look into America’s digital music buying habits, stating that 2.5% of people pay for music subscriptions, and 17% pay for downloads(5). With that in mind, lowered price through advertising support seems to be the best option for this promising new business model.

Carlton W. Washington II

(1) Hiatt, Brian. "Biz Bets on Subscriptions." Rolling Stone 13 Dec. 2007: 17.
(2) Barnes, Brooks. "NBC Will Not Renew ITunes Contract." The New York Times 31 Aug. 2007.
(3)"Nokia's unlimited music offer turns market on head." washingtonpost.com 4 Dec. 2007:
(4) Hiatt, Brian. "Biz Bets on Subscriptions." Rolling Stone 13 Dec. 2007: 18.
(5) Ibid.