Rumors Swirl Around Apple's Fee-Based Music Service

By Cindy Waxer October 08, 2010

Music lovers may be downloading tunes the same way they receive their newspaper – by monthly subscription.

That’s according to an article in the New York Post, which reported that Apple is in talks with major record labels to provide a subscription-based music service. Subscribers would be granted unlimited access to songs for a monthly fee, ranging from $10 to $15, depending on how much music would be included and how long consumers would be able to access the content.

Rumors have long swirled around Apple and what direction it plans to take its online music service as newcomers like Spotify flood the market. In April, Apple shut down its cloud-based Lala music service for reasons unknown, after acquiring it in December. Lala members were permitted to access their online collections until May 31, at which point Apple took the service offline completely. At the time of the Lala acquisition, Apple provided no details on the price it paid or its plans to integrate Lala into its music offerings.

Lala allowed U.S. users to stream and purchase over 8 million songs. Visitors could listen to a song once for free, pay 10 cents for a version that could be played online repeatedly or pay 79 cents or more for a copy that could be downloaded. However, Apple has long maintained that streaming music services could harm download sales.

As it stands, iTunes treats users to 30-second samples of songs. For a full-version, subscribers need to fork over their hard-earned money. And that they do. In February, iTunes’ sales tally hit the 10 billion mark. The company marked the occasion by giving the 10 billionth song purchaser a $10,000 iTunes gift card.

Even so, ever since Apple began allowing music labels to set individual song prices between 69 cents and $1.29 on the iTunes Music Store, growth of digital music sales has slowed. According to Peter Kafka at MediaMemo, Warner Music Group revealed that digital music sales have slowed since the price increase took effect in April 2009. Digital album downloads grew 5 percent in December, down from 10 percent in the September quarter and 11 percent in the June quarter. Digital revenue is slowing as well: Warner saw 8 percent growth in the holiday quarter, versus 20 percent a year before.




Edited by Tammy Wolf

TechZone360 Contributing Editor

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