iTunes Smorgasbrød Not Happening

by Eric March on March 21, 2008 at 9:52 am

No tunes for you! Come back one year! So sayeth sources close to Business week. You may recall a few days ago that the Financial Times floated the rumor that Apple was after the record labels to cut a deal that would allow Apple to offer unlimited iTunes music rentals on the cheap with the option to keep a few dozen each year. If that got your hopes up, then I’m afraid I have some bad news, as Business Week’s sources are saying that it just isn’t so.

According to a story in the Financial Times, Apple (AAPL) would charge enough for iPod and iPhone devices to cover the cost of licensing entire music collections. It would use that premium to create a pool of revenue, a portion of which would be divided among the major music labels, the newspaper said.

Trouble is, no such talks are under way, according to people familiar with Apple’s plans. An Apple spokesperson declined to comment. Insiders at major music labels were similarly dismissive. One person familiar with the matter said the idea of subscription plan has been “kicked around” for about a year, but said there have been “no meaningful discussions” on the subject.

So Apple have tossed the idea around for a while — which isn’t surprising, as it’s a good idea that’s been doing Nokia some good — but nothing significant has come of it. Although the market for buffet-style music downloads is relatively small compared to the à la carte crowd, those who are proponents of the argument do make some good points, which Business Week’s Peter Burrows expounds upon in a related article.

I suspect that Apple would like to see the idea come to fruition in one form or another, but in true Apple style, they’d like to shave a considerable percentage off the $80 premium Nokia currently gets for its Comes With Music handsets. Problem is, the music companies are stubborn and greedy, so the real question of whether Apple can pull it off is in their hands.

(Source: Business Week, via iPhone Alley)

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