Thursday, April 26, 2007, 06:00 am PT (09:00 am ET)
Apple's Jobs still not keen on iTunes subscription serviceApple chief executive Steve Jobs on Wednesday maintained his view that customers would rather own their music than rent it, suggesting he's unlikely to give in to calls from the music industry to add a subscription-based model to iTunes.
"Never say never, but customers don't seem to be interested in it," Jobs told Reuters in an interview after Apple reported blow-out quarterly results. "The subscription model has failed so far."
Jobs' comments come at a time when Apple is believed to be preparing for iTunes licensing renegotiating with several of the music industry's largest labels. As part of those talks, several of the labels are expected to badger the Apple chief to add a subscription model to its industry-leading iTunes Store.
The labels, which are battling an ongoing decline in sales of compact discs and the simultaneous proliferation of illegal music downloads through peer-to-peer file sharing networks, are touting the potential of subscription services to boost their revenues. They believe a subscription model would increase the consumption of music and allow them to reap monthly payments in addition to small licensing fees each time songs are played.
Thus far, however, Jobs appears poised to stick with Apple's current a-la-carte and album download model, which has catapulted his firm to the forefront of the digital download business. Since its inception back in 2003, the company's iTunes music store has sold more than 2.5 billion songs worldwide.
"People want to own their music," Jobs said.
For its part in the impending negotiations, Apple is expected to press the music labels for further concessions on selling music without copy-protection software known as digital rights management (DRM). In a landmark deal announced earlier this month, EMI Group — the third largest music label — announced that it would begin selling DRM-free tracks on iTunes in May.
"There are a lot of people in the other music companies who are very intrigued by it," Jobs said of the move. "They're thinking very hard about it right now."
The Apple chief executive is hoping pressure from the EMI move weighs on three of the other big labels — Universal, Sony BMG, and Warner Music — essentially forcing them to follow suit in order to remain competitive.
"We've said by the end of this year, over half of the songs we offer on iTunes we believe will be in DRM-free versions," Jobs told Reuters. "I think we're going to achieve that."
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