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New Hardware Could Affect Online Subscription Pricing
Microsoft has recently introduced a new application, currently called “Janus,” that allows tethered downloads to be exported to Janus-enabled portable devices. There are two devices available that use Janus and retail in the $500 range.
If Janus players become prevalent (although it is hard to see how they will ever overtake the iPod's market dominance), online services that offer both on-demand streaming, tethered downloads and permanent downloads may find a drop-off ' perhaps sharply ' in the sale of permanent downloads, because users will not have an economic incentive to buy permanent downloads when they have access to unlimited tethered downloads that can be transferred to portable devices enabled with Janus.
Some thought is being given to how pricing should be addressed for tethered downloads. First, it may be premature to do much of anything to address the issue as the iPod is clearly the dominant digital music device. The iPod plays only the proprietary Apple Fairplay/AAC code, and is not likely to be transcoded at any time in the foreseeable future to permit interoperability with a Windows operating system or software. Given the clear preference of consumers for the iPod, it may not make sense to introduce a price change in the market until there has been some time to observe how much uptake there is among consumers for Janus-enabled digital music devices.
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