Apple Mulls Flat-Rate "Unlimited Music" Option

Mike writes "Apple is in discussions with the big music companies about an 'all you can eat' model for buying music that would give customers free access to its entire iTunes music library in exchange for paying a premium for its iPod and iPhone devices. Finally, it looks like the industry (or at least Apple) is 'getting it'. The real question is not whether the big music companies will go for it, but rather, who will be the first one to get smart and agree to offer it?"

Comments

Free?

[flynt]

"free access to its entire iTunes music library in exchange for paying"

You keep using that word. I do not think it means what you think it means.

Never going to happen with me, friend

[elrous0]

I will NEVER give any one company the power to switch off my entire music or movie collection with the push of a button, or because of a computer error, or because their company went bankrupt or got sold.

Re:As long as

[wbav]

If you RTFA, the fee Apple is pushing is $20 and you keep the music as long as you keep the device. No word on CDs but I would expect that music would continue to play through iTunes, even if you sold the device.

Re:As long as

[TheNinjaroach]

I want to own my music. Then stick to CDs or unencumbered MP3s. The idea of a subscription service is that you keep paying for it to hear all the music you want. You would end up canceling your subscription the moment you downloaded as much music as your hard drive could hold and that would be the end of it.

Re:Why should I care?

[Bud Dickman]

Spoiler: There will be stories that appear on Slashdot that you do not care about. Not everything will apply to you, you egomaniac!

Re:As long as

[2nd Post!]

There is nothing illegal with having a monopoly; it is, as I said earlier, only illegal when you engage in anticompetitive behavior when you have a monopoly.

In the first case, Apple may have a monopoly in MP3 players. However they have done nothing anticompetitive (again, the example where Microsoft threatened to terminate Windows licenses to Compaq because they bundled Netscape). Anticompetitive means it hurts Apple but it hurts their competitors more. Anticompetitive would be withholding iPods from WalMart until WalMart stops selling Sony.

Offering a subscription service to iPod owners is not anticompetitive because it does not prevent the competition from responding in like, nor from competing.

Microsoft terminating Windows licenses from Compaq is anticompetitive because it stops Compaq from bundling Netscape; stopping the competition by manipulating their monopoly in Windows licenses.

So, again, how is offering a subscription service for iPods and iPhones anticompetitive? It doesn't stop Amazon from offering DRM free MP3s, it doesn't stop Microsoft from releasing their own subscriptions, it doesn't stop Sony from partnering with Rhapsody for a similar service.

Re:As long as

[2nd Post!]

All right, here is a list of common anticompetitive practices culled from Wiki:
* Dumping, where products are sold into a market at a low price which renders competition impossible, in order to wipe out competitors.
This might be dumping if Apple did not "pass on" the price to consumers. Given the initial up-front fee, however, the consumer appears to be paying fairly for this service.

* Exclusive dealing, where a retailer or wholesaler is 'tied' to purchase from a supplier.
This isn't exclusive dealing because the consumer can still buy music from Amazon, WalMart, Best Buy, etc and use it on the iPod. Likewise the music distributors are free to continue selling CDs and license to Amazon.

* Barriers to entry (to an industry) designed to avoid the competition that new entrants would bring.
Apple has established no barrier to prevent others from entering the market; witness Amazon's MP3 store

* Price fixing, where companies collude to set prices, effectively dismantling the free market.
This would be the case if Apple were colluding with Microsoft and Nokia so all paid the same price for licenses. This is not happening.

* Refusal to deal, e.g., two companies agree not to use a certain vendor
This would be the case if Apple were colluding with Microsoft and Nokia to lock out a certain vendor. This is not happening.

* Dividing territories, e.g., you get everything west of the Mississippi, we take everything east
This would be the case if Apple were colluding with Microsoft and Nokia for different regional markets. This is not happening.

* Limit Pricing, where the price is set by a monopolist to discourage economic entry into a market.
If we argue that Apple is a monopoly in MP3 players, this would only be applicable if they set the price of iPods low enough to prevent competitors; since this doesn't apply to the music store, nor is Apple charging too low a price, this doesn't apply.

* Product tying, where products that aren't naturally related must be bought together; this prevents consumer choice.
This would apply if the products weren't actually related; iPods play music, so purchasing a music subscription with your iPod actually makes sense. This also does not prevent consumer choice because consumers would have the option of not buying into the subscription.

* Resale price maintenance, where resellers are not allowed to set prices independently.
Resellers are free to raise prices; lowering prices would lead to losses and that is not illegal nor prohibited by Apple either.

* Coercive monopoly - all potential competition is barred from entering the market
This is what Microsoft practiced, using it's monopoly to prevent Netscape from gaining traction. Apple has not practiced that here, either.