updated 11:30 am EDT, Wed July 14, 2010
NPD finds many iTunes users willing to stream
As many as eight million iTunes users would be willing to pay for a streaming service on iTunes, the NPD Group found on Wednesday. An estimated seven to eight million have a "strong interest" in paying $10 or more per month either to stream music in general or to have remote access to their existing iTunes collections across many devices. If access to an existing collection were free, as many as 13 million to 15 million would use it, the researchers said.
Any service would likely scale quickly as customers get more or better Internet-connected devices like the iPad or iPhone, NPD analysts said, but could generate a lot of revenue even in the short term. If all of the interested users paid into a $10 monthly service, Apple would make about $1 billion in the first 12 months, or about two thirds of its current pay-per-track model.
The predictions come from a polling of 3,862 iTunes users and wouldn't necessarily extrapolate in practice or persuade Apple to follow a similar business model. Rumors have still been intensifying that Apple may be about to instigate a push towards the cloud for many of its iTunes services, including not just traditional subscription streams but device-to-device sharing and 99-cent TV show rentals that would never have to be stored locally.
Apple has never discussed its plans, but the creation of a large North Carolina data center has hinted at far larger ambitions than it has shown in the past. Streaming subscriptions have been tried in the past by Rhapsody and others, usually with little success, but always-available music has become increasingly important as smartphones and now tablets have constant Internet connections but little storage. Google will allow remote access through Android phones and may have a streaming paid music service of its own.