Apple may bundle unlimited iTunes with iPods
By
Chris Foresman
| Published: March 19, 2008 - 12:43PM CT
A report by the Financial Times
(registration required) cites unnamed executives who say that Apple is
in talks with record labels to offer access to the entire iTunes music
library for a lump sum price. The fee would be added as a premium
option on an iPod or iPhone, or it could come as a monthly charge. It
would allow downloading of any song at any time so long as the
purchaser still owns the device, and the songs would be yours to keep.
This latest concept is similar to Nokia's "Comes With Music"
program set to launch later this year. Nokia is reportedly rolling an
$80 fee into the price of compatible phones for one year of access to
Nokia's music store, which includes music from labels like Universal.
Apple's plan is different in several respects. Since the average
iPod owner buys about 20 tracks from the iTunes, Apple wants to make
the premium about $20, arguing that it should cover the average
consumer's downloads. Then the owner can make unlimited music downloads
from the iTunes Store for the life of the device. Once downloaded, the
tracks are yours to keep, even if you get rid of the original iPod or
iPhone. And since iPod and phone owners tend to replace devices fairly
regularly, the record labels would be getting the fee whether or not
the consumer makes any further downloads. Silicon Alley Insider did the math and thinks it's a good deal all around. But according to the Financial Times' sources, the labels are looking for numbers closer to the $80 Nokia is reported to be paying.
There's still the question of DRM, however. Even though the tracks are
yours, any non-iTunes Plus tracks will still be beholden to FairPlay restrictions,
so this could also be a good way to lock consumers into repeat Apple
purchases (unless they're willing to have their music tethered to their
computers). The Nokia plan use Plays For Sure, which won't play for
sure on iPods or even Zunes, and Comes With Music doesn't allow you to
keep listening to tracks once your subscription period has expired
While Apple's program certainly sounds like it could go over well with
consumers, the negotiations are not over. Apple will need to get all
the labels on board for the plan to work. If we've learned anything
from recent music licensing debates, it's that they are contentious.
How much do the songwriters deserve? What should be the labels' share?
In addition, the labels are sure to want a plan that increases their
revenue, rather than a plan that simply compensates them for what the
average iPod owner already pays.
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