Apple said to negotiate unlimited downloads of music purchases

Apple Inc.'s newest iPhone was in hot demand as hundreds lined up outside stores in Tokyo, Berlin, New York and elsewhere to become among the first to own the device.
By Adam Satariano and Andy Fixmer
(c) 2011 Bloomberg News
Friday, March 4, 2011; 9:47 AM

Apple is negotiating with music companies including Vivendi SA's Universal Music Group, Sony Music Entertainment, Warner Music Group Corp. and EMI Group Ltd., said the people, who asked for anonymity because the talks are private. An agreement may be announced by midyear, two of the people said.

The arrangement would give users more flexibility in how they access purchased music. Apple and the record labels are eager to maintain demand for digital downloading amid rising popularity for Internet services such as Pandora Media Inc., which don't sell tracks and instead let users stream songs from the Web, whatever the device.

A deal would provide iTunes customers with a permanent backup of music purchases if the originals are damaged or lost, said the people. The service also would allow downloads to iPad, iPod and iPhone devices linked to the same iTunes account, they said. The move would be a step closer to universal access to content centrally stored on the Internet.

Tom Neumayr, a spokesman for Cupertino, California-based Apple, declined to comment. Apple, maker of Macintosh computers, gained $7.44 to $359.56 yesterday in Nasdaq Stock Market trading. The shares have climbed 11 percent this year.

Amanda Collins, a spokeswoman at Warner Music in New York, declined to comment, as did Liz Young, a Sony Music spokeswoman. Peter Lofrumento, a spokesman for Universal Music, and Dylan Jones, a spokesman for EMI, didn't have an immediate comment.

Apple, which first began selling tracks through iTunes in 2003, became the top U.S. music retailer in 2008, surpassing Wal-Mart Stores Inc. ITunes accounted for 69 percent of all digital downloads in the U.S. as of September, according to research firm NPD Group Inc.

Music companies are grappling with stalled digital-download sales, a sign online purchases won't be enough to make up for declining sales of compact discs. Digital-track sales rose 1 percent in 2010, while total album sales fell 12.7 percent, according Nielsen SoundScan.

The new download policy is among several service changes Apple is exploring. The company has also weighed plans to overhaul its MobileMe service for storing pictures, videos and other content online this year, one of the people said.

Under one plan for MobileMe, the service that now costs at least $99 a year would become free. Users could store photos, contacts, e-mail and other content on Apple's servers, one person said. The content would be accessible through any wireless connection. The potential changes to MobileMe were previously reported by the Wall Street Journal.

Apple will be able to accommodate newly overhauled services with a new $1 billion data center in North Carolina. Chief Financial Officer Peter Oppenheimer said at Apple's annual shareholder meeting last month that the facility will be a hub for the iTunes and MobileMe services.

© 2011 The Washington Post Company