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Apple: A Little Curious About Rent-a-Tunes

Link: Apple: A Little Curious About Rent-a-Tunes.

Two music executives tell BusinessWeek Online that Apple began asking questions about the subscription model earlier this summer, soon after Internet giant Yahoo (YHOO ) unveiled a subscription service called Music Unlimited in early May.

While Apple told those music-industry execs that it had no concrete plans at the time, it expressed interest in the strategy of potential new entrants, such as e-tailer Amazon.com (AMZN ) and search powerhouse Google (GOOG ). According to the sources, it was the first time Apple staffers asked so many questions about the subscription model.

That doesn’t mean Apple is considering a move into this segment of the market. Indeed, says one of the sources, Apple would likely consider such a move only if one of its rivals began to make serious inroads into its market dominance.

I’ve said it before (and I’ll say it again) – there would be no harm to Apple’s business model if it adopted a subscription service in addition to its current sales model. Both can peacefully co-exist, and appeal to different sorts of users.

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  • james Bailey

    Apple won’t adopt a subscription model because it would require renegotiating their contracts with the record companies. Those companies want to institute a multi-layer pricing scheme that would ruin sales from the iTunes Music Store. They’ve already done this in Japan.

    Apple’s contracts are apparently good through 2006. You won’t see subscriptions until then and then only if Apple can’t re-negotiate the $0.99 flat rate price.