Chris Blackwell’s Domain

Over the past two days I have read five different stories, which all originate from a Financial Times posting stating that Apple is in negotiating talks with the record studios to create an all you can eat (all you can listen to) iTunes subscription. The talk has been that this extra feature would be a premium amount that you would pay when buying a new iPod ($100 is the estimated markup).

Did you forget that Apple is #2?

Apple earlier this year passed Amazon to become the second largest music distributer in the world, only behind Wal-Mart. So why would Apple now go ahead and try to break a model that seems to be working so well for them? Now I don’t want to sound like I’m saying Apple Will NEVER do a subscription model, because never is a very long time. What I am saying is that right now things are going great for Apple and the iTunes store and it wouldn’t make sense to move away from that.

I spend hundreds of dollars a year on iTunes, downloading music, TV shows, audiobooks, and soon hopefully movies (bring the iTunes movie store to Canada please). Now lately I have been buying less because I’m in this “only buy DRM-FREE music mode”, but most people don’t care. The average user plugs in their iPod to iTunes and buys whatever songs they want, and they think it’s a bargain at only $1 a song. Over the course of a few years most of these people will spend well over a hundred dollars on music, cause that is only ten albums. I know of dozens of people that would pay $100 tomorrow to download the entire Beatles collection on iTunes (if it were available that is).

iPod Sales Will Keep Increasing

I believe people are a little too caught up in these reports that keep surfacing about iPod sales. Yes, I do believe that iPod sales are dropping, but only because everyone already has an iPod. For a last couple of years Apple was doing very minor upgrades to the iPod lineup and not giving people a really good reason to go buy a new one. That all changed last fall with the introduction of the iPod Touch and the new Nano. With Wi-Fi built in, video into the nano, and let’s not forget the iPhone, people have a really good reason now to upgrade their iPods.

I will keep buying music this week, and the next, because I believe that a iTunes subscription, if any, is a long way off. Do you think we will see an iTunes subscription soon? Do you think iTunes needs a new business model?