Apple to offer iPod/iPhone subscription music at last?

By Alex Zaharov-Reutt
Wednesday, 19 March 2008 15:38

Mobility

Conventional wisdom states people want to own their music and not rent it, hence the success of iTunes without a subscription option – but this could all be about to change.

The Financial Times (FT) is reporting that Apple is trying to figure out how to offer the iPod with ‘free music’ for ‘the life of the device’ – either through an additional cost at point of sale, or through a monthly subscription fee.

Said to be similar to Nokia’s plans to offer a “comes with music” phone, so far only from Universal Music’s library, Apple’s supposed plans go much further – a deal with all the major labels instead.

The FT says that while Nokia is “offering almost $80 per handset to music industry partners to be divided according to their share of the market”, Apple is typically wanting to drive a much harder bargain – only $20 per iPod sold – with this supposedly being the main sticking point.

Apple and the music industry have fought before, with some in the music industry claiming the Apple is preventing them from offering music at different prices, while Apple simply wants to have a simple system with a standard price across the board for singles and albums.

The FT quoted an unnamed music industry executive who said that: “It’s who blinks first, and whether or not anyone does blink.”

Quite what Apple would charge for an iPod with the bonus of free music is unknown, but the FT has quoted music executives who said that “research had shown that consumers would pay a premium of up to $100 for unlimited access to music for the lifetime of the device, or a monthly fee of $7-$8 for a subscription model.”

The success of iTunes, which has sold in excess of four billion songs, has supposedly been because people prefer to buy their music and own it, rather than paying for a subscription which could see their music disappear if the subscription payments ever stopped.

But I can think of one subscription service that is wildly popular on a worldwide basis, suggesting subscription music could work, even if it hasn’t been the incredible success existing players have hoped for. Please read onto page 2.