Apple changes its I-tunes

Since Apple (AAPL) launched its wildly successful iTunes music store back in 2003, CEO Steve Jobs has adamantly refused to offer a monthly subscription service. If you want to buy music from iTunes, you do it either by the single or the album, that’s it. But that could soon change.

Les Ottolenghi, CEO of INTENT MediaWorks, a digital distribution system that works with peer-to-peer networks, said he’s had meetings with people from Apple and he believes the company will announce a subscription service for iTunes within the next six months. “I think Apple is seriously considering a subscription offering right now even though they will probably tell you otherwise,” he said. Spokespeople for Apple were not immediately available for comment.

So far though, it appears that Apple has made the right decision to spurn the subscription model. Rival online music stores, such as Napster (NAPS), RealNetworks’ (RNWK) Rhapsody and Yahoo’s (YHOO) Y! Music Unlimited, that offer monthly subscriptions have failed to attract a lot of interest. In fact, I wrote yesterday about how teens widely prefer iTunes to subscription-based music stores.

But Ottolenghi said that even though music subscription services have struggled against iTunes so far, he doesn’t think consumers are necessarily averse to paying monthly subscriptions. He argues that because Apple doesn’t offer a subscription product, that’s why music fans haven’t embraced the model.

Phil Leigh, a senior analyst with Inside Digital Media, an independent research firm based in Tampa, agrees with that assessment.

“The number one factor retarding the acceptance of the subscription model is the dominance of Apple. The idea of subscribing to music is new to most consumers so when the dominant player doesn’t talk about it, the idea seems out of the mainstream for most consumers,” Leigh said.

And as someone who buys from iTunes pretty frequently, I’d support a subscription model. For $15 a month, all I’d need to do is buy two albums a month to justify a subscription. I think many consumers would be amenable to paying a flat fee for unlimited downloads on iTunes.

That said, Leigh isn’t so sure that Apple is willing to do an about-face on subscriptions just yet…even though the record labels clearly would be overjoyed if Apple did begin to offer a monthly iTunes plan.

“Record labels would like a subscription service. They, like anyone else, like recurring revenue. Ringing the cash register every month is a beautiful way to run a business,” Leigh said. “But I don’t think they are going to do it because Jobs has said he’s against it and I believe that most of the time we should take people at face value unless we have compelling evidence not to.”

Plus, chatter about an iTunes subscription service is hardly new. BusinessWeek wrote about the possibility of a subscription model in August 2005 and CNET revisited the speculation last May.

Still, Ottolenghi was fairly confident that Apple will soon reveal an iTunes subscription service. He thinks Apple realizes that in order to attract more customers, particularly those that are using peer-to-peer file sharing services, Apple has to be more flexible.

“With peer-to-peer, there are 2.5 billion downloads per month compared to Apple taking three years to sell 1 billion songs on iTunes. That’s a big difference,” he said.

So maybe, just maybe, Steve Jobs will introduce an “all you can eat” iTunes 8.0 in the near future.

To subscribe or not,that is the Itunes Question

With rumors abounding that Apple Inc. (NASDAQ: AAPL) will turn the iTunes store into a subscription format, I'm wondering how much more the consumer will be forced to pay because the record labels will not acquiesce to the demands of the market. Forgive me if I sound resentful, because I am. In my opinion, Apple's iTunes makes the interface and purchase of digital music far easier than other services and while switching to a subscription service does not alter the interface or how you can listen, it drastically alters the ownership.

The record labels own the music, or at least the copyright and broadcast aspects of it. But if you buy a CD or an album, do you also own that music in some way? I would say that you do, but unfortunately that ownership comes with restrictions and guidelines that you, the consumer, must follow. Otherwise, the industry may come down on you with the force of a mighty storm. Consider how large the FBI warnings against copyright infringement are on CDs these days; not only the jewel case and digipak (cardboard) packaging but the actual CD.

Since I learned that iTunes may become a digital service, my outlook on whether to buy digital or physical formats has changed. Before the end of May there are about four new albums that I care to purchase (that's actually a low number for me if you are shocked by this value). When I knew they were going to be released, it was no question in my mind that I was going to buy the CD. That has changed now. I find myself pre-ordering on the iTunes store for the first time in the less than two years I have been a customer there. Fortunately, iTunes is nice about bonus and pre-order only tracks, so I can buy the albums at a lower cost for more music than if I went and purchased a CD.

However, I can see the benefits that a subscription service on iTunes would offer. The major benefit is the cost of the music and its reduction for the consumer. That may sound like an enticing offer, but it negates the ownership that I mentioned earlier. A subscription service acts as little more than a leasing agreement, where the consumer rents the tracks or albums they want to hear and must return them if they decide to end their subscription. For the consumer that has no issues about this matter, the deal is rather nice. But for the consumer who likes the aspect of purchasing the album (like me, for instance), the prospect of losing that edge in a digital world is unwanted.

The option to purchase a CD will theoretically always be present, but as the industry drifts more toward the digital market, those bonus and pre-order only tracks will make purchasing a CD pointless, unless similar measures are added to the discs. That ownership dilemma fuels this debate for me, because my CDs are my CDs. They may rightfully be the record labels or the artists, but I'd like to see them try and take an album like Revolver by The Beatles away from me just because they say it is theirs. Of course, the prospect of iTunes going digital at a time when The Beatles may become available for download scares me more than anything, because I want both the digital and physical formats that will hopefully be released.

If iTunes does go digital, I will likely follow. If the pre-ordering has shown me anything, it is that sometimes iTunes offers so much more than the CD on the shelf of a local retail store. It also makes my record collection less cluttered and I can hide the music that I like which may not be as "reputable" in the eyes of the "cool" people around me.

Apple to launch Wi-fi equipped Ipods

According to the rumor mills, Apple is planning on introducing a Wi-Fi version of three popular models of iPods, in the second half of 2007.

News reports reveal that Universal Scientific Industrial (USI) will produce the Wi-Fi modules and Foxconn will perform as the OEM system assembler. According to the reports, USI will begin shipments later in April, while Foxconn may do so in the third quarter.

Analysts say Microsoft's Zune has led to increasing development of Wi-Fi portable music players, with Singapore-based Creative and SanDisk showcasing such players at the 2007 Consumer Electronics Show. Also, Digitimes reveals that Samsung and Sony are also planning to offer similar products soon.

Apple sells its 100 millionth Ipod

CUPERTINO, California—April 9, 2007—Apple® today announced that the 100 millionth iPod® has been sold, making the iPod the fastest selling music player in history. The first iPod was sold five and a half years ago, in November 2001, and since then Apple has introduced more than 10 new iPod models, including five generations of iPod, two generations of iPod mini, two generations of iPod nano and two generations of iPod shuffle. Along with iTunes® and the iTunes online music store, the iPod has transformed how tens of millions of music lovers acquire, manage and listen to their music.
“At this historic milestone, we want to thank music lovers everywhere for making iPod such an incredible success,” said Steve Jobs, Apple’s CEO. “iPod has helped millions of people around the world rekindle their passion for music, and we’re thrilled to be a part of that.”
“It’s hard to remember what I did before the iPod,” said Mary J. Blige, GRAMMY Award-winning singer. “iPod is more than just a music player, it’s an extension of your personality and a great way to take your favorite music with you everywhere you go.”
“Without the iPod, the digital music age would have been defined by files and folders instead of songs and albums,” said John Mayer, GRAMMY Award-winning singer-songwriter and guitarist. “Though the medium of music has changed, the iPod experience has kept the spirit of what it means to be a music lover alive."
The iPod has also sparked an unprecedented ecosystem of over 4,000 accessories made specifically for the iPod that range from fashionable cases to speaker systems, and more than 70 percent of 2007-model US automobiles currently offer iPod connectivity.
“I take my running shoes and my iPod with me everywhere,” said Lance Armstrong, seven-time Tour de France champion. “I listen to music when I run. Having my music with me is really motivating.”
Every iPod features seamless integration with iTunes 7. The iTunes Store (http://www.itunes.com/) features the world’s largest catalog with over five million songs, 350 television shows and over 400 movies. The iTunes Store has sold over 2.5 billion songs, 50 million TV shows and over 1.3 million movies, making it the world’s most popular online music, TV and movie store. BULLET

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and will enter the mobile phone market this year with its revolutionary iPhone.