Don your bibs. It seems as if Apple
An "anonymous tipster" is telling MacDailyNews that Apple will unveil a music subscription plan within the next two months. iTunes Unlimited would let users pay a flat rate of $129.99 a year for top-quality streaming access to millions of the tracks in the iTunes library.
Trust me, I know the differences between a company spokesman, a credible unnamed source, and an "anonymous tipster." This may very well be a hoax, a competitive shot, or simply wishful thinking. However, it's really just a matter of time before Apple follows pioneers like Napster
It may not be revolutionary, but Apple has a habit of settling for evolutionary in its place.
Torpedoing the subs
Napster and Rhapsody aren't necessarily setting the world on fire with their "all you can stream" plans. Napster is so out of favor on Wall Street that it now trades for slightly less than the cash on its balance sheet. The company may serve 708,000 subscribers as of the end of June, but that's less than the 770,000 on its rolls last summer.
This doesn't mean that the premium unlimited model is broken. There are simply too many options out there. Apple certainly has had no problem growing its iPod user base; its recent iPod sales slowdown simply owes to the iPhone -- which is also an iPod player -- taking the baton. Sirius XM Radio
The plethora of premium subscription alternatives -- and its perfectly popular a la carte approach -- may explain why Apple has taken so long to enter this market. But it might as well jump in before top-tier companies with digital music interests like Amazon.com
Major opportunities for major labels
Music subscription models have been ignored by the market, but the same could have been said of digital music downloads until Apple entered the scene. Apple is a game-changer. After succeeding in digital downloads and smartphones, it might as well give digital music subscriptions a shot at both redemption and reinvention.
Portable streaming services don't seem to get in the way of piecemeal purchases. If the struggling major labels play their sound cards right, this could be another attractive incremental revenue stream, in the same vein as digital downloads and ringtones.
The high-margin splendor of inventory-free distribution is lost on the majors, because they still have chunky, old-school overhead to tackle. Only the nimble players like Orchard
You go, Apple
Who needs to bank on some "anonymous tipster" to make sense of the future? A better source popped up back in March, when Financial Times cited "executives familiar with the negotiations" between Apple and the major labels, suggesting that the only thing getting in the way of iTunes Unlimited was debate over the pay models.
The industry may not have changed much in that time, but now that Apple is the country's leading music retailer -- and Amazon's virtual storefront is now good enough to clock in fourth -- the labels really have little choice but to cave in to the digital demands of its distributors and consumers.
An anonymous tipster says it's coming. This not-so-anonymous analyst says it's about time.
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Longtime Fool contributor Rick Munarriz has bought more digital downloads than CDs this year, but that's not saying much. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
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