It 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.