Apple eyes broader iTunes services

Apple's online music ambitions are broadening - if the latest round of rumours are anything to go by. The Mac maker is said to be in talks to acquire digital music start-up HipSolve Media, and to have made a hire that could indicate it is laying the groundwork for the launch of a music subscription service.

According to a Think Secret report, Apple has offered $3.6m to HipSolve's owners, who are claimed to be talking to a number of possible buyers and/or investors.

HipSolve offers iHoopla, a Windows-based music distribution system the company has so far pitched toward labels as a low-cost means of selling DRM-protected music direct to customers, eliminating go-betweens like... er... the iTunes Music Store from the supply chain. It also offers a version for e-tailers to take out franchises from the labels, and there's also a version pitched at movie makers.

It's been suggested that products like iHoopla are a threat to iTunes. Maybe one day, but not now. Such is Apple's market share that it's going to take some time for such rivals to cause the company lost sleep. And iHoopla isn't the only such solution: is Apple going to buy them all? That seems unlikely.

Possibly Apple wants to widen its offer to labels who don't want to tie themselves into iTunes, or would prefer to target the potentially larger Windows Media device market. But Apple's strength lies in driving the iTunes brand, and it's hard to see how it might benefit by offering an alternative to its own product, at least for the foreseeable future.

Separately, AppleInsider notes that Apple has hired one Julia Miller, formerly head of marketing for Microsoft's Xbox Live online gaming service. She also worked on SegaNet, in years gone by. Xbox Live is a subscription service, leading the site to speculate that Apple is planning a similar business model for iTunes.

Alas, Miller's role at Apple isn't known, so it's entirely possible she has nothing to do with iTunes at all. Her resumé, according to AppleInsider, includes work on point-of-sale systems and loyalty-card schemes, so she may simply have joined the company to explore alternative iTunes - or Mac - sales and marketing channels.

Apple has, to date, dismissed the subscription model, stating its belief that music buyers want to own songs, not rent them. But Napster and others are showing there is some demand for monthly fee-charged 'all you can eat' services, which at the very least appear to offer better margin opportunities than a la carte downloads do.

At this stage in the game, it's far too early to tell whether consumers will prefer one service model or the other - most likely both will operate alongside each other, just as the DVD sales and rental markets do, for example. It seems unlikely, then, that Apple's doesn't at the very least have a contingency plan in place to roll out a subscription service if it feels the market needs one, or its rivals do rather better than it anticipates they will.

Whether Miller has been brought on board to oversee the scheme, or even to prepare its roll-out, remains to be seen. AppleInsider mentions some industry insiders who claim Apple will offer such a service by the end of the year. That may require fresh negotiations with the labels, assuming Apple didn't factor such a model into its original licensing deals, as Napster did. ®

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