updated 02:00 pm EDT, Tue April 26, 2011
iTunes cloud music may not be free for long
Apple's iTunes cloud music plans might not necessarily be free to use, contacts in the music business hinted Tuesday. They stopped short of claiming to know the pricing but heard it could be free to use at first and incur a fee later. CNET in getting the tip also didn't learn how the model would work, such as whether it would be a trial for a MobileMe subscription or if it would be a separate fee.
The price might be necessary to reassure labels. Apple is suspected of making much better progress than Google in landing deals, but insiders have regularly mentioned labels pushing for a second charge. Despite the service simply relying on accessing a user's existing collection in the cloud, the labels allegedly interpret this as a second use that needs extra royalties.
Google Music was rumored to be going the same route with a $25 yearly charge to offset labels. Whether or not it ever gets there has been thrown into doubt after Google purportedly reversed much of its progress. It may be considering a switch to Spotify precisely to avoid the label demands Apple would also face.
The approach may be the labels' hope of instituting a recurring fee knowing that Apple has often resisted any kind of subscription. Month-to-month access has often been vehemently opposed by movie studios, which stand to lose money, but have been sought after by the music industry. A typical $10 subscription equates roughly to buying an album every month where most listeners would otherwise buy only a few albums a year.
Apple may be willing to accept passing on the costs in order to both claim an edge over Google and give iOS devices a workaround for the limitations of flash storage. Cloud access would let users get at their entire collections through streaming without having to buy more expensive iPads or iPhones.