• Financial Times, Wednesday, March 19, 2008 11 AM

Apple is in discussions with the big music companies about a new "all you can eat" subscription model for its iTunes music service that would give its users free access to the entire iTunes library in exchange for paying a premium for its music enabled devices like the iPod and iPhone. This is the same model as the "comes with music" deal Nokia struck with Universal Music a few months ago, although this would include each of the four biggest recording studios.

The plan now hinges on the price the iPod maker is willing to pay for access to the labels' music catalog. Nokia, for example, is reportedly offering music industry partners almost $80 per handset, which would be divided according to their share of the market. Apple so far has offered $20 per device.

Research claims consumers would be willing to pay a premium of up to $100 for unlimited access to music for the lifetime of the device, or an extra $7 to $8 per month for a subscription model. The latter would only work with the iPhone, where Apple bills its customers monthly for the device. The subscription models under consideration would include allowing customers to keep up to 40 or 50 tracks per year.

Read the whole story at Financial Times »