Apple close to offering subscription music service?
Fresh off of a deal with the movie studios that effectively reversed the company’s position on rented content, it now appears Apple may also be about to embrace a subscription-like model for music.
According to a report in the Financial Times late Tuesday, the company is currently in discussions with the major labels over licensing their content on a subscription basis. So far, it appears the biggest roadblock is price.
Apple is said to be offering the record industry about $20 per device — iPod or iPhone — sold to give its customers unlimited music downloads from the iTunes store, which would be split among the labels according to market share. It currently appears as if the industry feels this is insufficient.
By comparison, Nokia is offering the labels about $80 per device, according to reports. The handset maker has struck a similar deal where its customers are granted unfettered access to partners’ music catalogs.
The sudden embrace of subscription content by Apple after years of pushback could be a case of simple market trends. Sources told FT that research has shown consumers would be willing to pay either $7-8 per month, or a one-time charge of $100 for unlimited music downloads.
Both options appear to be on the table in discussions. The report points to one option where up to 40 or 50 tracks could be downloaded per year, which would be transferrable to other devices, and would remain in the consumer’s possession even after the subscription lapses.
“I won’t speculate whether the rumor is correct or not but I can say that it does make sense,” remarked JupiterResearch analyst Michael Gartenberg. He pointed to Apple’s work in movie rentals as laying the groundwork, and noted the company would market it well as another option to enjoy music from iTunes.
“Add in the fact that any service would work in the whole ecosystem of iTunes supported devices and the proposition looks very good for something like this to succeed where others have struggled,” Gartenberg concluded.