A year ago, Steve Jobs told Rolling Stone magazine that the "subscription model of buying music is bankrupt." His own iTunes Music Store, an a-la-carte download store, seemed proof of this assertion, shooting to prominence with sales that left subscription services in the dust. Fast forward to today, and a different picture emerges. A JupiterResearch survey quoted by CNET shows that more "online adults" are interested in using subscription services than are interested in downloading $0.99 singles (17% as opposed to 16%). Among "music addicts" who spend more than $45 every three months, the number is 37%.

The benefits of subscription based jukebox services—unlimited listening for a fixed price and ease of use—seem to be catching on. Usage at the leading service, Rhapsody, grew by 19% from the 2nd to the 3rd quarter of this year: 202 million on-demand songs were played. Other key subscription services are Musicmatch On-Demand and Napster.

—Andy Breeding

Back to Online Music Updates