Is Steve Jobs about to open an ear-candy buffet?
This morning's Financial Times reports that Apple
Apple isn't breaking new ground here. Napster
But those services haven't been the bonanza you may expect. Napster has posted 19 consecutive quarters of adjusted losses. Its stock also trades just shy of the $1.59 per share in cash sitting on the company's balance sheet, so the company is essentially worthless in terms of enterprise value.
The key here is that Napster watches over just 743,000 paying subscribers. By virtue of its girth as the leader in digital music and portable music players, Apple has a substantially larger potential market.
This move would obviously hurt Napster. It would hurt RealNetworks, too, although not as much, since it has a lot more going on than just Rhapsody. And it would whack Sirius
There's no free lunch, even at the smorgasbord. Offering an unlimited service would probably come at the expense of its a la carte sales. Why pay Apple to download a track or an album when you can have immediate access to millions of songs with a subscription model?
Apple may not have much of a choice, especially if it wants to keep iPhone sales running briskly. Nokia
This is where the Apple deal is currently entangled, according to the FT article. Apple and the major labels are apparently far apart on a pricing model. A lot is at stake, with Apple having most of the leverage. Labels may fear that they will forgo future digital sales by participating in the program, but that revenue stream may dry up anyway, once the unlimited streaming model launches.
The song may remain the same, but the tempo is clearly changing.
Dance to this Foolishness:
