Apple isn't known for sitting on profitable business ideas. But it appears to be doing just that with iTunes. The company has made no moves to network iTunes or allow users to access their music from multiple locations. And according to a new survey from NPD Group, a third of iTunes users might pay to access their music from the cloud.

What's more? NPD estimates that music in the cloud could be a billion dollar market. In the first year.

NPD polled 3,862 iTunes users age 13 and up to find their interest in a music service that might offer free and unlimited streaming of content from the consumer’s own iTunes music library. They were also asked about paid options for music subscriptions that might offer music streaming, music downloads and universal web access to their iTunes music library.

NPD found that about 25% of iTunes users would be interested in free access to their library anywhere. That would translate into 13-15 million customers in the US if Apple were to implement it. NPD estimates that 7 to 8 million iTunes users would be willing to pay for it (a minimum of $10/month).

Considering how much Apple stands to make from such an offering, it might seem surprising that it is stalling on this front. But from another perspective, free access to iTunes goes against the grain of Apple's business model.

Here's how Gizmodo put it recently:

"You can sum up the most frustrating thing about being an Apple customer in three little words: 'Connect to iTunes.'"

As a computer company, Apple is very much tied to the idea of organizing digital products around the computer. To date, all of Apple's products require connecting to one central device. Even Apple's cloud product, MobileMe is a bit antethetical to the idea of cloud computing. Unlike Google's widely available (free) line of cloud products, Apple charges a premium to access any of its services from varying locations. MobileMe costs $100 a year.

The likelihood that iTunes would offer up cloud access to music is pretty unlikely. However, charging for such a product could make a lot of business sense. Considering that iTunes accounts for about 10% of Apple's revenues, it seems like an experiment worth making. But with Apple's dedication to selling computers in mind, it might be a long time before we see it.

Meghan Keane

Published 14 July, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Comments (1)


Jon Henshaw

This probably has more to do with legalities and how Apple would like to provide the service. They will want to do it differently and innovate on the concept, which means a harder buy-in by archaic music labels. The delay is also most likely due to product tie-ins. That is, products that haven't been announced yet, hardware add-ons, and software upgrades to support it. I think it's a matter of when, than if. It's one of those things that seems inevitable, especially in light of their Lala purchase.

about 8 years ago

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