Billboard is citing industry sources as backing up a report in the Financial Times that says that Apple is in talks with the major record companies, and especially Universal Music, about launching a "pre-loaded" iPod. Though Digital Music News question just how keen Apple really is on the idea, and also cites sources who say the whole thing could be blocked by the music publishers anyway. But whatever, lets look at what's being discussed shall we?
A pre-loaded iPod would basically be a reworking of the subscription model for digital music which iTunes have so far resisting dabbling in. The pre-loaded iPod would have instant on-demand access to all songs in the iTunes catalogue, including music from all four majors. A premium would be added to the cost of the device which would be passed onto the record labels in return for the access.
Unlike the normal subscription model, like that employed by Napster, there wouldn't be any monthly or annual renewal fee, access to the iTunes catalogue would last for the life of the device. The hope is, from the record companies point of view, that most people will replace their digital music players every 1-2 years, so although in theory the pre-loaded player offers ever-lasting access to the iTunes catalogue, in reality it's a 1-2 year subscription to a Napster style service.
The model expands the "comes with music" package offered by Nokia which gives consumers who buy special Nokia mobile phones unlimited access to the whole Universal Music catalogue for a whole year (and now to EMI music too - they having announced just yesterday plans to participate in the Nokia programme later in the year). That, in turn, is seen by many as a prototype for the Total Music concept, the proposed major label owned digital music service being touted around by Universal Music chief Doug Morris, and reportedly supported by SonyBMG.
The motivation for Morris et al in supporting the pre-loaded device model is presumably that inkling that the real money in digital music is in the sale of hardware - ie digital music players and mobile phones - rather than in download sales. With the exception of Microsoft's Zune player, where the majors do get a cut of hardware sales, the record industry has so far not seen a penny from the booming digital music player market. A pre-loaded iPod package would change that.
According to reports Morris first suggested the pre-loaded iPod to Apple chief Steve Jobs late last year, but discussions have become more serious in the last month, though Billboard's sources stress that any deal is far from imminent.
Meanwhile, there has been much speculation as to what kind of levy the labels would look to get from the digital music player manufacturers in order for them to be 'pre-loaded', and more to the point whether said manufacturers would ever be willing to pay those sorts of sums - which in turn would depend a little on how much more consumers would be willing to pay for an MP3 player that comes filled with music.
There's been speculation also on what kind of technology will be used to deliver the music (ie to stop it being transferred to other non-pre-loaded devices) and just how unlimited the unlimited access to music would really be - some reckon the majors would actually look to limit the number of tracks accessed or the time the free access actually ran for - in the same way the Nokia package only runs for a year.
As for how the labels would repay their artists for music accessed in this way - well, that's anyone's guess. Probably pretty randomly.