Rumors of iTunes music subscriptions fly again

Jordan Golson — Wed, 20 Aug 2008 14:19:55 -0400

Here we go again. A pair of Mac sites, TUAW and MacDailyNews, both received anonymous tips today outlining how an iTunes subscription music store might work -- and both are plausible enough to be true. That said, given the rampant speculation and misdirection that exists in the Mac rumor world, this info should be taken with a non-trivial grain of salt.

MacDailyNews says the service will be called "iTunes Unlimited" and offer 50% of the songs currently on the traditional U.S. iTunes store through the program at launch. The subscription will be for one year and be available through iTunes or a retail box, similar to how MobileMe/DotMac is sold. iTunes Unlimited would launch, initially, on the U.S. store only. The subscription would cost $129.99 on its own, $179.99 with MobileMe or $99.99 for existing MobileMe subscribers. The site claims a late September announcement with late October rollout, just in time for the holiday season. TUAW received (almost certainly from the same source) a similar report.

Last March, The Financial Times reported that Apple was in negotiations with music companies that would give Apple's customers access to the entire iTunes music library in exchange for a modest fee -- or a premium on iPods and iPhones that would guarantee unlimited music for the lifetime of the device. Executives familiar with the negotiations told the FT that "they hinged on a dispute over the price the computer maker would be willing to pay for access to the labels' libraries."

Nokia has a similiar "all you can eat" model on some of its phones, and reportedly pays $80 per handset to labels. The Financial Times claimed that Apple had offered $20 per device, leaving a wide gap between the two sides. One exec said "it's who blinks first, and whether or not anyone does blink."

Nothing ever came out of the report, though I suspect it was accurate. In the past, Jobs has claimed that customers want to "own music," in response to competitors offering music via a monthly subscription service, but don't let that put you off. For years Jobs shot down the idea of iPods with video or an Apple-branded cell phone -- until they suddenly appeared on stage at an Apple event.

As I wrote in March, Jobs "doesn't care one bit about digital-rights management software ... that record labels insist on. And he knows that most consumers don't care about the issue. He just wants to sell iPods, and his customers just want to buy them."

Jobs just needs a hook to keep iTunes -- and the iPod/iPhone ecosystem -- on top. Selling music players with "all music included forever" would give Apple an edge that no competitor could match.

Think you know what's going down? We've set up a prediction around the "iTunes Unlimited" introduction. Place your bets and let us know what you think in the comments below.

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Rumors of iTunes music subscriptions fly again