Reuters Examines Subscriptions vs. iTunes

The effect of subscription music services being a threat to Appleis iTunes dominance in the music download business is the subject of an article by Reuters. The article postulates that iTunes is facing pressure from subscription services, which it says "may be on the verge of explosive growth."

The article comes on the heels of Napsteris announcement last Thursday that it was raising estimates on the current quarter based on the strength of its subscription music services. Though dwarfed by Appleis iTunes service in terms of revenue, Napster reported growth in its subscription services, and increased sales of Napster supported digital media devices from iRiver and Dell.

David card, an analyst with Jupiter Research, told the news organization that he thinks subscription services will outpace downloads by 2009 in terms of revenue, if not users.

"Subscriptions are a great thing for real fans because you get access to a lot of music. The appeal is itis on-demand. As long as you keep paying, its all there," he said to Reuters. "We think many millions of people will be buying 5 to 15 downloads per year versus fewer, a few million, who will spend 10 to 15 dollars a month for subscriptions."

Apple CEO Steve Jobs has gone on record more than once as saying that people prefer to own their music, rather than rent it, and that this is why Apple was not interested in offering a subscription service through iTunes.

Jupiteris Mr. Card, however, noted that Apple will likely take a practical approach to the situation before all is said and done.

"The only reason they have iTunes is to sell iPods. If it turns out subscription services are important to sell iPods, theyill probably get into that business," Mr. Card told Reuters.

There is more information in the full article, which is being hosted at AOL News.