The rumor mill is abuzz today with reports Apple might be considering a premium service, that would allow you to pay a premium, $100 perhaps, over the normal iPod price for the privilege of lifetime downloads from the iTunes Music Store.
And believe it or not, this actually makes economic sense for everyone involved.
First a look at the numbers. As of January, Apple had sold 150 million iPods according to analysts. And from Apple's press releases, the music store has sold roughly 3.5 billion songs. Some quick division shows that's a mere 24 songs per iPod sold. Let's say the $100 premium is split evenly between Apple and the labels. That still means more than double the revenue from iTunes than now, for everyone involved. Well, of course except for the artists. (Quick tip: don't go into music for the money.)
Additionally, Apple would be an ally of all the big labels. After all, which player will they push if they're getting such a fine cut? Sure, other players will inevitably get the same deal, but it will be too late.
This would also eliminate the headache of users losing music in a hard drive crash: simply create a restore library option to bring all those songs to your new hard drive.
But what about TV shows and movies you ask... Well, they would most likely not be included. However, Apple could partner with the new industry site hulu.com to make TV shows available for free with advertising. TV show sales and movie sales, by all accounts, haven't quite caught on fire on iTunes. Imagine the possibilities to stoke AppleTV sales. And if the content's free anyhow, there wouldn't be nearly as much resistance to adding dvr functionality.
Overall, it's a sensible, though probably unlikely scenario. After all, this is the same company that still makes users pay $99 a year for .mac email...
Wednesday, July 30, 2008 at 9:42AM