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iTunes subscription will top discussions for contract renewals
James Oakwood
0 comments 17 April 2007
The four major record labels are about to start negotiations with Apple over content for the iTunes Store, and a subscription model is likely to be top of the agenda.
According to the Financial Times newspaper, the companies are becoming frustrated with the current system, as Apple take a far great share of the sale of songs and albums that they would like. They feel that a subscription model would give them a larger slice of the profits and also go some way to combating illegal downloads.
"The record industry, in particular, has long been frustrated that Apple has reaped most of the profits of the burgeoning online music market through sales of its iPod player," wrote the Financial Times in its feature. "By contrast, they have earned only modest royalties from digital music sales because most of the songs on iPods and other devices result from illegal download."
The report also claims that the music companies are desperate for a company to produce a viable iPod alternative, as they’re also irritated by the fact that Apple have an 85 per cent market share of legal downloads with the iTunes Store.
iPlay Opinion
Rumours of a subscription model have been thrown around for a couple of years now, but the record companies will not be happy that they feel they have no control over the way Apple distribute their music – remember that they recently lost their bid to fluctuate the costs of music on the store – so they might be more forceful this time around.
If a subscription model is going to be introduced, expect it in the next six months.
Story via AppleInsider. For the original story, go here.
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