| "Apple
is under pressure from the four major labels to change its pricing model to a
tiered pricing structure," said Susan Kevorkian, an IDC audio analyst. "The
way the labels are pressuring Apple is by withholding DRM-free downloads from
the service while cultivating other online music services, most notably Amazon's
MP3 downloads store. Though
Amazon isn't stealing many customers from iTunes -- only 10 percent of Amazon
MP3 customers have bought from iTunes in the past, yet Apple needs to keep itself
on the upfront. Apple
though, has other ways to grow iTunes without relying on the iPod, such as music
subscriptions. The most obvious scenario is a PlaysforSure-style subscription
service, which would require a new, stronger version of FairPlay DRM and rule
out compatibility with older iPods, as per reports. Another
option would be an eMusic-style subscription in which customers get a fixed number
of songs per month, getting a better deal than purchasing the songs individually. There
is also the so-called "unlimited music" iPod, which could be on the
tracks. "We think the issue holding things up is how much money per iPod
the labels get," states Kevorkian If
it becomes difficult for Apple to deal with the music labels it could eventually
cut them out, at least part of the equation by forming its own record label to
keep a portion of the estimated 65 cents it currently pays out to the labels for
each song sold. Apparently,
only Steve Jobs knows which of these paths Apple will take, but iTunes' prospects
for the next five years looks as bright as they have been for the last five. | 
