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MARCH 21, 2005:
MORE ON RENTING VERSUS OWNING MUSIC

The debate on Napster To Go versus iTunes goes on and on, with many people loudly wondering if a renting music model (à la Netflix for movies) will prevail, or a by-the-track model such as iTunes offers. These debates are useful are but not quite getting down to the bottom of things yet. A quick two points on this:

1. IT´S NOT EITHER OR (NEVER IS). Rather, I think that some users will rent access to music for a cheap monthly fee that has them covered, plus they will download individual tracks, and some will still buy CDs and DVDs. However, the difference is that with a no-frills and easy-to-use subscription model I can convert a lot more people to buying music to begin with. Rather than accepting that 40% of consumers leave the music stores without buying anything, how about engaging 80% of all consumers with a cheap, flat-rate music subscription. This is where Napster wants to go, I’d say, but being hobbled by DRM is certainly going to make that mission much harder.

2. CONSUMERS, GUESS WHAT: YOU DON´T REALLY OWN YOUR TRACKS ON ITUNES EITHER. There is DRM on these tracks you purchased for those precious dollars, and your rights to “own” them can be revoked. It just feels like you own it since most people won’t get near the limits that Apple’s DRM (Fairplay) imposes on them. The fact is, though, we are just renting here, as well. Why else would people try to crack it?