Legends of the fall: Apple rumored to introduce subscription service

It’s that time of year again, when a young man’s fancy turns to rumors of the Apple persuasion. Of course, it’s far from ridiculous to presume that Apple will be making some announcements in September—they’ve done so for the last few years anyway, often using a special event as a launching pad for consumer-level products like iPods and the iMac.

Now one nameless source suggests that Apple might be ramping up a subscription music service for debut next month. On the face of it, this seems unlikely, but the deeper we dig…well, okay, it still seems kind of unlikely, but that’s just the sort of thing that Steve Jobs revels in pulling out of his invisible hat.

The main argument against Apple rolling out a subscription service is one of desire—if sales are any indication, subscriptions are a niche business. Despite challenges from existing subscription services (which, as you might notice, have been dropping faster than Michael Phelps’s competition) and the increased availability of DRM-free, iPod-compatible music from the likes of Amazon, Napster, and Rhapsody, iTunes still holds a commanding lead over its rivals in not just the digital music space, but also in the retail space as a whole.

So why would Apple roll out a service for which there seems to be no pressing demand and which itself has little need for? Well, allow us to flip this coin Harvey Dent style.

If Apple’s learned anything from .Mac/MobileMe—aside from the importance of forward planning—it’s that recurring revenue is delicious. Especially when it comes with low overhead (granted, that plan hasn’t exactly gone smoothly in the case of MobileMe, but iTunes itself has been pretty stable over the years).

There’s a business advantage to adding a subscription service, as well. Apple’s relationship with the labels has been, er, rocky. And by “rocky” I mean like the part in Rocky where Sylvester Stallone gets the crap beaten out of him. The labels have been wary of Apple’s continued influence in the music industry, but if there’s one way assuage that concern, it’s riffling a stack of fresh Benjamins under the industry’s collective nose. Because if there’s one thing the labels like even more than suing their own customers, it’s free money. Adding subscriptions would potentially be one way for Apple to get back on the labels’ good side, perhaps even giving them the bargaining chip to finally expand their DRM-free offerings.

And what of Steve Jobs’s repeated insistence over the years that people want to own their music, not rent it? Well, with Steve, things are always a bad idea until they’re not. It certainly wouldn’t be the first time the man has done a 180°. Personally, I still maintain that a video subscription service would be something many customers would be willing to pay for—it’s a field that hasn’t been well-explored yet, and there’s no clear leader in the pack. But the success of a subscription movie service could very well determine how Apple proceeds on video.

This isn’t the first time we’ve heard whispers of Apple considering an alternative to straight-up music purchases—back in March, there was a story in the Financial Times that Apple was discussing a new model of distribution, which could potentially take the form of increasing the cost of iPods in exchange for access to the labels’ music catalog. While two data points don’t constitute proof, they do make a line. And that line seems to point to some sort of new business model involving iTunes. In the words of Green Day, wake me when September comes.