Universal Music's Doug Morris and Sony BMG Music are talking to Warner Music Group about trying to put together a new service, Total Music, that would compete with Apple's proprietary iTunes Store, according to Business Week.
While the details are in flux, insiders say Morris & Co have an intriguing business model: get hardware makers or cell carriers to absorb the cost of a roughly $5-per-month subscription fee so consumers get a device with all-you-can-eat music that's essentially free. Music companies would collect the subscription fee, while hardware makers theoretically would move many more players. "Doug is doing the right thing taking on Steve Jobs," says ex-MCA Records Chairman Irving Azoff, whose Azoff Music Management Group represents the Eagles, Journey, Christina Aguilera, and others. "The artists are behind him."
I suppose it could work with mobile phone networks, because they are still able to gouge users on price. But in terms of portable MP3 players, this is fruitcake economics. You can't possibly hide a $90 subsidy (for the 18 month lifespan of an MP3 player) in the price of a Flash-based machine that costs $45. (Prices of 1GB Flash players now start at around $10, and you can get a Samsung or SanDisk for $50-$100.) You can't even hide it on a $250 disk-based player, and the prices of those will have fallen further by the time Total Music hits the web.
Actually, there is a cheap device where you just pay for the hardware and then you get an infinite supply of music for no extra charge. Billions of people already own one, and (at least) tens of millions of people have small portable versions. It's called an FM radio. In fact, most decent MP3 players (except iPods) already include one free.
