Rumored iPod/iTunes Store Subscription Bundle Already Raising Hackles

Remember, this is based on a rumor, not an actual announcement. If this comes to fruition, the anti-competitive arguments are going to be fierce.

The chief executive of eMusic, David Pakman, compared the situation to anti-competition cases against the software company Microsoft, which has been fined hundreds of millions of dollars for bundling media applications in with its Windows operating systems.

“If you have to buy iTunes when you buy iPods that is clearly anti-competitive behaviour by a monopolist,” he said. “It would absolutely catch the eye of European competition authorities.”

Pakman certainly has a good point here, but that’s a big if.

Pakman said it would be less anti-competitive if Apple were to make the bundled downloads optional, charging a premium on iPods and iPhones that included access rather than always including access.

But, depending on the price, it could still spell disaster for labels and music retailers. “If you could buy all the music you wanted for $20, why would you buy CDs or downloads?” he said.

Here, though, the problem with Pakman’s argument is that Apple can only offer such a service with the permission of the record labels. Presumably the labels will negotiate a price that will spell something other than “disaster”.

★ Sunday, 23 March 2008