Apple follows the crowd towards the all-you-can-eat biz mod?
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.
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.
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Requires a FT subscription (free) I'm afraid.
This looks like an interesting battle between the two giants Nokia and Apple. Nokia has already signed up w UMG for a similar deal and apparently the fruit people don't want to be left behind. FT cites some research which says that consumers are very willing to pay a premium for bundling music w hardware in either subscription form or an initial time limited download period linked to the purchase of the product. It is going to be crowded in that biz mod segment with major players such as Nokia, Apple, LG, and probably also a number of oeprators who are interested in bundling entertainment services with their infrastructure offering.
The big Q this time is NOT how to collect the £€$ from the consumers. That is sort of self-explanatory. The tricky thing is how should this be distributed in the back-end.... Will the artists and the song-writers get their share. And the right artists and song-writers for that matter. If the distribution scheme will be based on mainstream data such as radio airplay or Internet stats, it might be pretty far from fair. On the other hand, if stats is expected to be collected from actual listening behaviour there might be some serious privy issues raised instead.