Looking For A New Model

Stephen Yagielowicz
As adult website operators seek to refine their business models in an attempt to bolster sagging sales, some are considering other means besides recurring memberships as the billing option of choice — with many operators eyeing the success of iTunes and its ala carte pricing as the only way to go today.

The grass always being greener on the other side of the fence, however, it seems that Apple is going the other way, as it looks at offering iTunes as a subscription service.

According to the New York Post, Apple execs are in talks with major record labels in hopes of offering unlimited access to its music library on a monthly subscription basis.

“One top music exec said the labels are supportive of the idea and believe it could re-energize digital music sales,” the Post states. “While album downloads have been on the rise, single track sales were flat in the first half of 2010 compared to the previous year.”

The Post report claims a possible monthly iTunes subscription rate of $10-$15 for unlimited access, with the rate tiered according to the number of tracks listened to and for how long they’re kept. While this is speculation at this point, there are several compelling reasons to believe that it may be true.

Driving the renewed speculation surrounding Apple’s plan for an iTunes subscription service is the inclusion of popular music service Spotify as part of Microsoft’s Windows Phone 7. Launch of the European company into the U.S. market was reportedly hindered by its reliance on advertising support for its streaming music service, which is delivered free to consumers — a business model that music companies dislike in comparison to the guaranteed upfront payments that a subscription-based service guarantees.

There is also Apple’s acquisition of the Lala music service and its social networking technology that allows users to share playlists; with cloud-based user storage accounts for easy playback and support for mobile devices among other features, which could be used to form a formidable music subscription service.

“One thing’s certain: The future of music (and media in general) is in the cloud, and the first company that gets the music industry to finally submit to that idea in a big way will have a huge advantage over its competitors,” the Post article concluded.

Time will tell if Apple is listening — or already moving to a subscription model.