Apple Said to Consider Subscription Model

The latest buzz out of Cupertino is that Apple may be considering a subscription-based model for next-gen iPods and iPhones. Similar to Nokia’s deal with Universal Music Group, Apple would apply a one-time surcharge to the purchase price of their digital music devices, which would give users access to the entire iTunes store. The deal seems to be stuck on what that surcharge should actually be with a range between $20 (as Steve Jobs wants it) to $80 (closer to the Nokia deal and reportedly pushed by the labels).

If true, this is quite a turn around for Jobs who in the past has said that subscription models a failures.

“Never say never, but customers don’t seem to be interested in it,” said Jobs in May, according to Rolling Stone.

I would be surprised to NOT see this go through as it ensures users stick with Apple products, lest they lose all those tunes on they iPhones.

What do you think? Do you prefer the 99 cent download or a moderately priced subscription?

12 thoughts on “Apple Said to Consider Subscription Model”

  1. Maybe I misunderstood, but if someone who, say, buys a new iPod next year gets free reign of the iTunes store for a nominal fee, what about those of us who’ve shelled out way more than $80 purchasing music from iTunes in these last 5 years? What do we get for our troubles? Hook it up, Steve.

  2. Ah…that may be the golden question.

    And will there be an option? What if I prefer the pay-per-download model? Can I stick with that? Or will everyone buying a new iPod be forced to pay the surcharge?

    I think those are the niggling details that keep Steve’s financial analysts up at night.

  3. “What do we get for our troubles?” Well, historically, from Apple, you get the shaft. Don’t worry, based on history, you’ll also swallow the shaft and continue to to defend to the death your device against any less stylish looking deice.

  4. I don’t see them getting rid of pay-per-downloads, they could easily have both running together.

    I also don’t understand the surcharge on the device idea. that’s not a “subscription” model at all. Apple is going to give you access to all of iTunes for perpetuity for $80? no way.

  5. Yeah, I would be surprised to see the pay-per-download go away entirely as that has been a pretty consistent revnue stream for Apple.

    Additionally, how would independent artists be compensated? GLONO bands get a tasty cut every iTunes download (79 cents, as I recall). I doubt our share of a $20 surcharge would be as beneficial as that.

  6. The surcharge/subscription would have to cut you out from downloading the song. Out of range for your wireless service? No songs you haven’t paid to download. Then Apple could get kickbacks on your access minutes.

  7. GLONO receives $0.637 per song (or $6.37 for a full album). CD Baby takes a 9% cut of what Apple pays out. If I didn’t suck at math, I’d be able to figure out how much Apple pays CD Baby.

  8. Sadly, Niarb, you are probably right.

    But as others have suggested here, it’s doubtful Apple’s gonna give up on a good revenue source like pay-per-download nor are they gonna give new iPod buyers free reign without some sort of catch.

  9. How about neither? Personally, I want a DRM-free library that doesn’t disappear if you lose your subscription. The Pirate Bay makes it possible.

  10. That’s fine and dandy but I am not opposed to a system that ALSO pays the artists and labels.

    The reason I hate the major lables is not becuase I think all their work should be provided to me for free, I just think it should be available at a fair price (which the “market” is establishing by dint of p-2-p sharing that undercuts the MSRP), without ANY DRM, especially any that breeches my personal computer files, and is transferrable to any medium I choose. The majors appear to be interested in none of that.

  11. Absolutely agree with you Derek – I have no problem paying for music, major or indie label…the problem is that the majors refuse to recognize what the market value for music is today, in light of $9 dvds, etc.

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