Unlimited Tunes from Apple?

          Ever since the first iPod was introduced, demand of from young generation to the old has increased greatly. By the look and the easy to use factor of iPod allowed millions of people to carry it with them and play music whenever they wanted to. However, there are still a lot of competitions in the market- actually it is growing faster than ever- and Apple's sales through iTune have been slowing down. To restore its fame over music industry on the web, there's been a rumor that Apple is now considering to pursue a new business strategy to increase its sales through iTune, which is the unlimited access to music service (so called "Tunes") with monthly subscription.
          Currently, iTune offers each piece of music for .99 cents and customers can purchase 12 songs a month and no more for months on end. According to the article, the music industry has been complaining about iTune's pricing option since they do not offer different prices for the songs that are considered to be more valuable instead of .99 cents for each song.
          The benefit of Apple for having the monthly subscription is that it allows the company to have constant predictable stream of revenue. Also, the article explains that if iTune adopts this strategy, there are people who don't want to buy each song for .99 cents on iTune but would pay monthly subscription to have unlimited access to all kinds of songs.
          The main reason why Apple does not adopt this plan yet is that iTune has been very successful in the world; now “it’s the second largest music retailer in the U.S. behind Wal-Mart Stores. It boasts some 50 million customers and has sold some 4 billion songs since its inception in 2003.” (BusinessWeek). However, since the sale of iPod is slowing down, Apple might want to consider a new business model such as the subscription plan. If the sale of iPod decreases, sales on iTune is likely to decrease as well because most of people who use iPod purchase songs on iTune; they are complementary goods. Also, other new competitors such as Facebook and MySpace are now working on their own music store plans.
          I’m not an iPod user or very into music; however, since I’ve seen how much Apple has grown through its sales on iPod and iTune, it’s very interesting to see that now Apple might have to consider a new business model to compete in the industry. I remember that when the first iPod was introduced, I used to say it looks dumb and the function of it cannot match with other MP3 players such as iriver or Samsung. However, with right marketing and business strategy, I noticed that more and more people carry iPod with them, not only for listening music, but a part of their fashion trend. Furthermore, I believe that iTune has been playing an important role on keeping the copyrights and informing teens to know that downloading songs from the web without paying the right amount for the service is illegal. I hope that Apple would consider having such strategy to stay strong in the industry because I also think that it would allow many other customers to benefit from the unlimited access to their favorite music.

Reference;
http://www.businessweek.com/technology/content/mar2008/tc20080319_503917.htm?chan=technology_technology+index+page_top+stories

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