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" It&amp;#039;s an interesting time for the music business--piracy is now a given, technology companies such as Apple have remade both distribution and playback, and it&amp;#039;s clearer than ever that the way labels do business is ripe for reinvention. In a cover story this past weekend touting legendary music producer/swami Rick Rubin as the industry&amp;#039;s potential savior, The New York Times Magazine reintroduced us to the current conventional wisdom in the entertainment industry: The subscription model is the future. &amp;quot;You&amp;#039;d pay, say, $19.95 a month, and the music will come anywhere you&amp;#039;d like,&amp;quot; Rubin is quoted as saying. &amp;quot;The iPod will be obsolete ... And once that model is put into place, the industry will grow 10 times the size it is now.&amp;quot; Not mentioned in the article was the fact that subscription services already exist. Music sites such as Napster and Rhapsody allow access to unlimited music for $10 to $13 a month--much less than the $20 Rubin proposes. Although they don&amp;#039;t offer the complete flexibility of Rubin&amp;#039;s scenario--a virtual library on your phone, in your car, on your TV--they do allow you to download music to your portable devices and listen to them on the go. Yet none of the subscription models are anywhere near as successful as Apple&amp;#039;s iTunes Store, which is, notably, not a subscription service ... yet. Despite Rubin&amp;#039;s unquestionable sense for quality in music, I wonder about his judgment of technology. In what fathomable distant future has the iPod become obsolete? Today, Apple will introduce a new batch of the music players--if the rumors are true, we&amp;#039;re looking at a new, smaller Nano with video functionality and, potentially, a larger touchscreen iPod, maybe with integrated Wi-Fi (stay tuned for more as we hear from Steve Jobs). Plus, iPod functionality is built in to all iPhones, which makes the nonsubscription iTunes store more relevant to the music industry than ever. Nevertheless, the all-you-can-eat subscription model should work, and it would certainly make sense for real music lovers--the more music you listen to, the cheaper the overall cost per song becomes. What&amp;#039;s more, subscription certainly works for Netflix, which continues to grow with streaming subscription on demand. So why do users still want to pay 99 cents per song and not, say, $15 for a month&amp;#039;s worth of infinite songs? Would the iTunes Store work just as well as a subscription service?  EARLIER: Apple Tells Glenn Derene Why iPhone and iTunes Don&amp;#039;t Get Along EARLIER: Does iPhone Signal Death of the iPod Clickwheel? EARLIER: Before YouTube, Glenn Reynolds Predicts a New Salvation for Digital Movies PM NEWS: Follow Apple&amp;#039;s New iPod Announcement It&amp;#039;s a compelling thought: A wireless, &amp;quot;access anywhere&amp;quot; iTunes (or, let&amp;#039;s be fair, Sony, or EMI, or Warner Music, or Napster, etc.) where you could download anything and everything you want, whenever and wherever you wanted to hear it--on the go, at home, out at a club. And you could play it and keep it as long as you like, and you&amp;#039;d never have to worry about digital rights management issues when you wanted to play those songs on different devices or share them with your friends. And little elves would dance for your amusement as you scrolled through playlists. Okay, back to reality. If iTunes ever does pursue a subscription model, I suspect it will be a hybrid model that still allows individual song purchases. The ownership impulse for music is greater than it is for other, more rentable media such as movies. Plus, the music industry hasn&amp;#039;t engendered a lot of trust in the music-buying public. The idea that your priceless collection of Dylan, Duran Duran and Timbaland could be held hostage by a service provider, meanwhile raising prices to unreasonable levels or instituting policies you disagree with, is enough to keep people paying for each song or album individually. In many ways, the winning sales model that people end up embracing in the coming years will all come down to pricing. Apple&amp;#039;s iTunes Store makes sense because 99 cents per song seems like a fair price to pay for something where you, the customer, are providing both the means of distribution and storage--it allows a song to be an impulse buy. Many current subscription services nickel and dime their customers, charging them extra to burn music to CDs or exempting certain albums from the all-you-can-eat price fix.  EARLIER: Apple Tells Glenn Derene Why iPhone and iTunes Don&amp;#039;t Get Along EARLIER: Does iPhone Signal Death of the iPod Clickwheel? EARLIER: Before YouTube, Glenn Reynolds Predicts a New Salvation for Digital Movies PM NEWS: Follow Apple&amp;#039;s New iPod Announcement Imagine this: a $15 rate for unlimited downloads per month, rather than 15 songs courtesy of grandma. The reality? Apple would never pursue anything more than a hybrid subscription-song model. Which brings us to another of the big ideas circulating around the music industry these days: popularity pricing. This model makes the cost of each song scalable depending on demand--a song by a niche indie band could cost 40 cents while a song by a big act such as U2 would sell for $1.50. Letting the market drive pricing could be a good idea or a horribly bad one. In the Internet realm, where a world of illegal, free material is only a few mouse clicks away, high-priced content can become an incentive for bad behavior. That said, I think there is a marvelous opportunity to be had in such an open market. Piracy and online distribution only represent the first wave of trouble to hit the music industry. The second is the way technology is lowering the barrier to entry for music production. Even the most sophisticated recording is possible to produce on an ordinary laptop these days.  So, what if an iTunes Store were integrated seamlessly with, say, GarageBand software, allowing people to compose and record their own music and post it for sale, splitting profits with the store and even doing much of their own marketing through a built-in social-networking component? Then, depending on whether the music labels were behind it, a new pricing model could be either the salvation of the industry, or the death of it. EARLIER: Apple Tells Glenn Derene Why iPhone and iTunes Don&amp;#039;t Get Along EARLIER: Does iPhone Signal Death of the iPod Clickwheel? EARLIER: Before YouTube, Glenn Reynolds Predicts a New Salvation for Digital Movies PM NEWS: Follow Apple&amp;#039;s New iPod Announcement &amp;quot;Popularity pricing&amp;quot; sites such as Amie Street, which received a round of Series A financing this month from Amazon, aim to scale song costs based on user preferences and artist growth, rather than at a flat rate or with DRM headaches.  "^^<http://www.w3.org/2001/XMLSchema#string>
<http://www.popularmechanics.com/technology/gadgets/a4562/4221332/>