March 18, 2008 9:54 PM PDT

Apple reportedly mulling all-you-can-eat iTunes

Posted by Charles Cooper

The Financial Times may have nailed one hell of a scoop Tuesday evening. According to the paper, Apple is considering an all-you-can-eat plan in which users would receive free access to iTunes "in exchange for paying a premium for its iPod and iPhone devices."

Is Apple ready to offer its smorgasbord of songs in a single package deal?

(Credit: Apple)

The company reportedly is still in discussions, according to sources speaking on background to the FT.

"The 'all you can eat' model, a replica of Nokia's 'comes with music' deal with Universal Music last December, could provide the struggling recorded music industry with a much-needed fillip, and drive demand for a new generation of Apple's hardware.
"Apple would not comment on the plan, but executives familiar with the negotiations said they hinged on a dispute over the price the computer maker would be willing to pay for access to the labels' libraries.
"Nokia is understood to be offering almost $80 per handset to music industry partners, to be divided according to their share of the market. However, Apple has so far offered only about $20 per device, two executives said. 'It's who blinks first, and whether or not anyone does blink,' one executive said."

If accurate, this would mark a big about-face for Steve Jobs, who previously has dismissed the rental music model. So far this evening, nobody's been able to confirm the FT story. But the story has triggered a fury of interest over at Techmeme. For instance, VentureBeat's MG Siegler raises an interesting question: with iPod sales said to be slowing down, what's the sense of adding a premium to the products? What's more, he asks:

"Another question is if Apple really wants to complicate the store known for its simplicity?
If consumers who bought these 'unlimited' iPods have access to all the music for free, they'll still have to pay for all video content presumably. Also, what happens if someone doesn't want to go out and buy a new iPod to get this deal, do they opt-in by paying Apple $100? The FT report also suggests that a subscription package may only work with the iPhone and that such a deal would simply be added on to a user's monthly AT&T bill--so what about those users without iPhones?"

Hopefully, we'll be able to answer some of these questions with more clarity in a few hours. Stay tuned.

Editors' note, March 19, 7:45 AM PDT: News.com's Greg Sandoval now has the lowdown from a source close to the deal. See "Apple could split device sales with music labels.")