BusinessWeek Offers Thoughts On Apple's Rumored Music Service

BusinessWeek has published a new Byte of the Apple, by Alex Salkever, that looks at Appleis rumored music service. News of the service was broken by the LA Times last week, and has since been confirmed by other mainstream news sources, though Apple has so far not commented on the subject.

BusinessWeekis take on the situation looks not so much on what the rumored reports say might be in the service, but rather what Alex Salkever hopes might be included. Included in this look are important issues concerning copy protection, artist royalties, and other things issues concerning the "beleaguered" music industry. From the article:

For starters, I would set up a demand-based pricing system. now offers unfettered access to its tracks, but each burnable download costs 99 cents, and the service has been very slow to catch on. I think Apple should set up a system that makes more economic sense to customers.

To date, the music industry has failed to capitalize on enormous pent-up desire for back-catalog songs. At the same time, it has missed out on ridiculously strong demand for songs high up on the charts. By keeping prices constrained within tight boundaries, the industry doesnit collect a penny from the millions of people who might balk at paying a buck for an old Miles Davis recording but would take the plunge for, say, 45 cents.

Likewise, Listen.comis set fee prevents the service from making more money from tracks people might be willing to pay a little extra to download. Think of the millions of fans who might pay $2 to get the new Eminem track a week early.

Apple should break this mold by pushing for floating pricing that actually establishes variable market prices based on how many people are downloading a song. It would be good for Apple by improving its serviceis bottom line. It would be good for the back-catalog artists who rarely get downloaded at 99 cents a track but might well generate some income at lower prices. And it would be good for Eminem and the record companies by capitalizing on the biggest acts.

Check out the full article for more information.