Report: Apple is exploring "all you can eat" and subscription models for iTunes Store

itunes all you can eat take 2It comes as no surprise. Apple is said to be in discussions with the major record labels to allow customers unlimited access to the entire iTunes music library in exchange for paying a premium for iPod and iPhone devices.

The Financial Times reported late today that negotiations for an “all you can eat” model — similar to Nokia’s “comes with music” deal with Universal Music Group — are underway, although it appears Apple and the labels are still a ways off for anything to happen.

According to the FT, Nokia “is understood to be offering almost $80 per handset” to music industry partners. Apple has offered only $20 per device, according to two unnamed executives.

“It’s who blinks first, and whether or not anyone does blink,” one executive said to the FT.

Exploring an alternative or an “in addition to” business model for iTunes comes as no surprise as Apple, a consumer savvy company to begin with, is clearly protecting itself against future shifts in the market and/or consumer behavior.

While Apple recently became the No. 2 music seller in the U.S. (behind Wal-Mart), both the iTunes Store and the iPod line of products are maturing — as is the online music market — and some future shifts are likely to occur.

The FT noted detailed market research “has shown a strong appetite” among consumers for bundling music with the cost of a new player or in exchange for a monthly subscription. The FT did not provide the source of the research.

Supposedly monthly subscriptions in the $7 to $8 range would work only for the iPhone as Apple already has a billing relationship with consumers through mobile carrier AT&T. The “comes with” model would work with the iPhone and iPods.

last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

3 Responses to “Report: Apple is exploring "all you can eat" and subscription models for iTunes Store”

  1. Marshall Kirkpatrick says:

    Wow. I hadn’t even considered such a thing, though perhaps I should have. Are we talking MP3s by chance? 🙂 DRM free and you can count me in.

  2. Steve O'Hear (editor) says:

    @ Marshall

    It’s not clear if it’s MP3s or AAC with DRM, but I suspect the latter if it’s similar to other offerings. Because of these kind of subscription schemes, I’ve long-argued that DRM isn’t really dead at all.

  3. Faisal Riaz says:

    I can not believe in the payment to music indutry partner where Nokia to be offer almost $80 per handset” to music industry partners and Apple with only $20 per device…. the difference is two big…

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