RandomMaccess Analysis: Reuters gets it wrong in iTMS 'Multi-Pass' analogy
March 8, 2006 | by Chuck La Tournous
We're bracing for the inevitable "Apple blinked" stories regarding the company's new "Multi-Pass" option for buying content from its iTunes Music Store. From the description in a Reuters article about the service, you'd be forgiven for lumping it in with the subscription-based models offered by Rhapsody and Napster.
You'd be forgiven, but you'd still be wrong.
Start with the lead: "Apple Computer Inc.'s iTunes music and video store on Wednesday took its first step toward a monthly subscription model..." First step? the inclination is clearly that there are more steps yet to be taken, yet the article offers no evidence for this.
And this: "Apple has so far (emphasis ours) resisted calls from media companies and competitors to adopt a monthly subscription fee favored by the likes of Napster and Real Networks Inc.'s Rhapsody..." Again, the description in incremental terms, as if a subscription-based model is a mere inevitability.
But Apple's Multi-Pass is nothing like the subscription-based model of Napster or Rhapsody. As far as we can determine, there aren't even any recurring charges. Most importantly, the content is not "rented." You won't lose your ability to watch "The Daily Show" if you stop ponying up a monthly fee. It won't be deleted from your iPod if Apple decides you've watched it enough.
Here's how it works. Episodes of shows like Comedy Central's "Colbert Report," for instance, are sold individually for $1.99. But for $9.99, you can buy the next 16 shows and download each after it's been broadcast.
No, Multi-Pass may be a subscription model, but only in the conventional "Hey, Mister, please support my school with a year's worth of "National Geographics" sense. If you buy a year's subscription to Macworld, for instance, you'll pay a lot less per issue than if you pick them up each month at your local newsstand. But each issue is no less yours. Jason Snell isn't coming to your house at the end of the year to collect your copies of the magazine.
For whatever insidious intent Reuters may want to ascribe to Apple's Multi-Pass, the simple, boring truth is that it's a retailing tactic that probably goes back to the first caveman who wanted to clear out last year's wheels to make room for the new models. One that fast-talking, plaid-jacketed salesmen have been using ever since. "Hey buddy, they're a dollar ninety-nine a piece, but I'll give you the whole shebang for a mere 10 clams."
Multi-Pass, dear readers, is nothing more complicated than a volume discount.
Keep that in mind when you read some of the pundits' takes on it over the next few days.
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