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iPod - Arvind Narayanan's journal [entries|archive|friends|userinfo]

iPod [Oct. 23rd, 2006|11:11 pm]
Arvind Narayanan
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Apple released the iPod 5 years ago today. Since then, their stock price has been like this:




The arrow shows when the iTunes store debuted.

Whether or not you like the product, you have to applaud these guys.

I can understand why someone would buy an overpriced music player, but I just don't get iTunes. Do people simply not own a lot of music? I just calculated that if I were using a pay-per-song music service instead of subscription, I would be paying a hundred times more. Not an exaggeration. One. Hundred. Times. More. What gives?
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Comments:
From: nicertry
2006-10-24 01:20 pm (UTC)
was going to say something to the effect of -- well they have managed to make the product incompatible with standard formats (i.e requiring that only aac format can be played) -- but then i realized there is nothing really stopping people from importing their previously collected music database into it ..
the other comparison would be that before itunes introduced the pay-per-song model, the only option for people was the pay-per-cd model where they had to pay for reasonable amounts of junk to get 1-2 favorites -- that would be a key product differentiator .. though i dont see why people wont move to a subscription service (could be customer lock-in .. people already shlled out money for the overpriced player.. so theres not much incentive to move to a service thats incompatible with that player!)
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From: (Anonymous)
2006-10-24 04:01 pm (UTC)
Apple had a first move advantage. Before Itunes if you wanted to get a song you buy a CD or get it from a friend or download it illegally. Itunes was legal, fast, cheaper than CD's and compatible with the coolest player in the market. Both contributed to each others popularity.

Also, a song bought on IPOD can heard as many times as you want. While on subscription you can only hear it for a month unless you pay again. I am not quite sure the amortized cost is really for subscription. Also, you end up hearing a lot of crap on subscription just because it is free.
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[User Picture]From: arvindn
2006-10-25 01:24 am (UTC)
Pay-per-CD is a very good point. Would it be fair to say that what you guys are saying is that if you're entering a new market, what matters is not to have the best product, but to have a product that's better than the traditional alternatives while sweeping up mindshare? I completely agree with this.
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[User Picture]From: floopilot
2006-10-24 11:00 pm (UTC)
I completely agree with the comments above - the biggest drawback of subscription services is that they're all drm based and hence work only on PCs or non-iPod music players (not to mention you need to pay extra for portable music).

The question is though - why don't people switch to drm based players? One reason, could be, as the comment said, it has the first player advantage - people have already bought it, dont want to switch. The second reason I think is the cost-for-cool value. Ipods, as you might know, cost more to produce than the selling cost (60GB hdd for that less?) Apple gambled very cleverly here hoping to build up the brand name and recover costs from other products. Well, it's worked for them. The other players however don't have this alternate product base to bank on and there's no way Creative or others can come up with an UI and features as good as an iPod and offer it at the same cost. So, that leaves a few nerds out there who feel passionately against the iIunes domination (OR don't want to be associated with the 'crowd') that actually buy the other players.

I'd be very interested in understanding your comparison of to-go subscription service costs v/s buying singles cost .. details pleases? :)
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[User Picture]From: arvindn
2006-10-24 11:31 pm (UTC)
Firstly, DRM is essentially a bit in your music file saying "this file is crippled", and if you change that bit from 1 to 0, poof, DRM is gone. So from the point of view of the slightly technically savvy customer, DRM doesn't exist. This is a slight oversimplification (eg. individualization), but essentially true.

I don't know for sure if it is legal to do this: as far as I know, removal of DRM on content that you own for your own use has never been tested in court, and is likely to be held up as fair use. It is, at any rate, largely risk free, because any legally questionable activity happens on your own computer as opposed to illegal music downloading, and therefore undetectable.

Nevertheless, your average subscriber does not even have the knowhow/sense/whatever to download and run a simple program, so I will assume for the purposes of this discussion that DRM is ironclad.

DRM applies equally well to pay-per-song and subscription, assuming that you are going to pay your subscription forever. iTunes doesn't let you download non-DRM music. With subscription, I pay a flat fee of something like $150 a year. I try listen to all the music in the genres of carnatic, hindustani and qawwali that are available, and significant numbers of hiphop, arabesk, and a few other genres. In the year or year-and-a-half I have accumulated almost 10^4 tracks. Obviously I won't have spent $10k if I were using pay-per-song, but hypothetically that's what it would have cost to purchase it all.
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From: (Anonymous)
2006-10-25 05:29 pm (UTC)

How did you 'accumulate' 4000 tracks?

How did you accumulate 10000 tracks using a subscription service? The moment you stop you paying your subsciption fee, your music disappears.
Of course, if you're un-DRM-ing them and keeping them, I don't see the point in using a subsciption service at all. You might as well use bittorrent.
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[User Picture]From: arvindn
2006-10-25 05:34 pm (UTC)

Re: How did you 'accumulate' 4000 tracks?

I plan to pay subscription for ever. I don't anticipate a point where I will suddenly say 'oh, looks like all the good music in the world has already been created, I don't need new music any more.' Ten bucks a month is a very nominal fee. That's less than my Netflix subscription, and I listen to way more music than I watch movies.
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[User Picture]From: floopilot
2006-10-27 07:56 am (UTC)
ah, sorry for getting to this a bit late .. you seemed to have moved on but what the heck ..

so yeah, you must admit that you are not the typical user - 10000 tracks per year translates to listening to almost 30 different songs a day, every day of the year .. i doubt an average person has time/energy/passion to experiment so much.

most people really like some songs and like to listen to them again and again. they usually have access to these songs through CDs/cassettes/iTunes/illegally-downloaded mp3s. now and then, they really like a different/new song they heard at a bar or on the radio and decide to go and buy it .. earlier they had to pay $17 for CD, with iTunes they get to buy just that one song for much less.

the behavior that you are describing however is of proactive users of subscription services, who decide to suddenly try out a new genre say "bluegrass" and go and listen to 200 new bluegrass songs in a week. And move on to a new artist or genre the next week. but even with these people, i don't think this sampling is sustainable.

so, my take .. i don't think people are stupid to not stop buying music altogether (CD/iTunes) and switch to subscription services.

ps: i **DO** own a subscription to one of these services and have for more than a year now - but then i hardly think i'm a typical music listener. BUT, I'm not ashamed to admit that, for the first few days of my subscription, most of the songs i downloaded were old/favorite songs that i had listened to and liked before (and mostly likely left behind in my CD/cassette stash back home)
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[User Picture]From: arvindn
2006-10-27 01:18 pm (UTC)
yeah, i guess that makes sense. Thanks.
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