A dramatic shift in the way you will be consuming and paying for music on your iPod or iPhone could be in the making, according to an article published by the Financial Times. Instead of shelling out $1 for each track, the iPod maker apparently is aiming for an upfront payment in exchange for access to a complete music library over a certain period of time. The idea is not entirely new. Some readers may remember the announcement of Nokia’s “Comes with Music” service, which allows users to download an unlimited amount of music for free for 12 months. Announced in December of last year, the Financial Times said that Nokia may be paying its flagship partner up to $80 per device for this program, but market research indicates that this investment is apparently paying off.
The newspaper said that Apple has been in negotiations to close a similar deal, but the company isn’t willing to pay as high as a premium as Nokia and has put a limit on $20 so far. Interestingly, the Financial Times quotes market research that has shown that consumers could be convinced to spend more than $100 for unlimited access to music over the lifetime of a device, or up to $8 per month as a subscription service. An all-you-can-eat music subscription model could be very lucrative for Apple, since it is generally believed that the company is not exactly making a killing on music sales through its iTunes store: Instead, Apple is using the service as a marketing vehicle to promote its iPod and iPhone products (which usually have huge profit margins between 33 and 50%).
Source: FT, TG Daily