Apple explores preloaded iPods, iPhones with record labels

March 19, 2008

Apple explores preloaded iPods, iPhones with record labelsOne of the largest criticisms of the music industry as well as U.S. technology markets is that they tend to be behind the curve globally in regards to innovation and change. Word has it that Apple is looking into one way to push those boundaries as the leader in the media player market — Apple is in talks with record labels about the possibility of splitting device profits in exchange for giving customers unlimited access to the iTunes library for a set period of time.

According to CNET, Apple began talks with the largest of the 4 major record labels, Universal Music Group, approximately 6 months ago; since then, it has contacted and began discussions with the remaining 3 studios about the possibility of offering a device (not yet decided) preloaded with music from the iTunes library in exchange for a cut of the device profits.

Apple really isn’t the first to captain this idea; Nokia established a “Comes With Music” program with Universal Music that is due to begin in sometime in 2008. However, Apple’s adoption of a similar program will no doubt be much more significant to the electronics and music industries.

The source of this information, who chose to remain anonymous, obviously has very close ties to the music labels. The source claims that the music industry feels slighted by the success of Apple’s music sales through iTunes, and believes this new program will finally ensure the music industry and its artists get their respective dues.

The new program would supposedly involve selling a new device with an unlimited subscription to the iTunes library for a predetermined period of time; once that period expired, the subscription would roll over into a paid service.

OKAY. With that all on the table, there are some really cool parts to this deal — and some other parts that probably won’t fly. There’s a good chance that an Apple device with free downloads for a certain period of time would be a big hit as gifts. In that sense, the idea is great.

For the record labels, I think the idea probably won’t be as fruitful as they intend it to be. The subscription service wasn’t ever particularly popular with consumers, and I think prepaid Apple devices will suffer if consumers are forced into a contractual obligation above and beyond the initial free period.

All in all, this could be great for those looking to give (or get) an expensive gift that sidesteps the inconvenience of all those bothersome iTunes gift cards. However, if the music industry thinks this deal will somehow start paying dividends on what’s due to them, they’ve got another thing coming *cue Judas Priest song*.

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