EMI and Sony BMG to launch 'all you can eat' iTunes package

by Gareth Jones, Marketing 01-Apr-08, 08:40

LONDON - UK record labels are planning to boost revenue by offering an 'all you can eat' mobile download package in partnership with Apple.

EMI, Universal Music and Sony BMG are believed to be in negotiations with Apple to make their back catalogues available in exchange for a share of profits from iPhone and iPod Touch sales.

The proposed business model would give consumers free, unlimited access to the iTunes Store in return for paying a premium for some Apple digital music players.

Analysts believe it could provide the record industry with a much-needed boost. 'Record labels need to look at how they can harness mobile devices to boost declining sales,' said James Bates, media director at Deloitte.

The UK digital downloads market grew by 30% last year, with 78m singles sold, while sales of CD singles fell by 37.7% to 8.6m over the same period.

Record labels are finding it difficult to compensate for the decline in traditional sales as consumers tend to spend less online than they would in-store.

Universal Music has already signed up to Nokia's 'comes with music' offering, which allows consumers who buy compatible phones to download its tracks free of charge for one year. EMI is also in talks with the handset manufacturer about making its back catalogue available via the service.

Nokia is believed to pay £40 a handset to music industry partners, while Apple is offering to pay £10 for each device. Industry insiders claim there is strong demand from consumers for 'bundle' deals that offer a free download package as part of the device's retail price.