“Apple is in discussions with the big music companies about a radical new business model that would give customers free access to its entire iTunes music library in exchange for paying a premium for its iPod and iPhone devices,” Andrew Edgecliffe-Johnson reports for The Financial Times.
“The ‘all you can eat’ model, a replica of Nokia’s ‘comes with music’ deal with Universal Music last December, could provide the struggling recorded music industry with a much-needed fillip, and drive demand for a new generation of Apple’s hardware,” Edgecliffe-Johnson reports.
“Apple would not comment on the plan, but executives familiar with the negotiations said they hinged on a dispute over the price the computer maker would be willing to pay for access to the labels’ libraries,” Edgecliffe-Johnson reports.
“Nokia is understood to be offering almost $80 per handset to music industry partners, to be divided according to their share of the market. However, Apple has so far offered only about $20 per device, two executives said. ‘It’s who blinks first, and whether or not anyone does blink,’ one executive said,” Edgecliffe-Johnson reports.
Apple, which is thought to make relatively little money from the iTunes store compared with its hardware sales, is also understood to be examining a subscription model [which] would work only for its iPhone devices, where it has a monthly billing relationship with customers through the mobile phone operators offering the device, while the ‘comes with music’ model would work with iPhones and with iPods,” Edgecliffe-Johnson reports.
Full article here.
Obviously, we need more details, but our initial response is that if it’s optional, we’re all for it. If it’s not, meaning that everyone who buys an iPod and/or iPhone must pay the premium, regardless of whether or not they will ever listen to music from the participating labels (or even listen to music at all – believe it or not, some people use, for example, iPod touch, sans music, for things like email, surfing the ‘Net, TV shows, etc.), then we’d be markedly less enthusiastic.