Jupiter analyst offers Apple iTunes advice

Jupiter Research analyst Mark Mulligan has a few tips for Apple boss, Steve Jobs.

Writing in his blog, Mulligan notes that all the attention of recent months has focused on the iPhone, with scant notice being paid to the iPod or iTunes – but the rumour machine is just starting up in support of these products.

“So add that dynamic to us being smack in the middle of the silly season and it makes sense that rumours are finally beginning to bubble up, principally around a full iPod range refresh and an iTunes subscription offering,” he notes.

“Needless to say it doesn’t pay to try to second guess Apple, more often than not they surprise us. So I’ll use this opportunity instead to scope out my short wish list from a music service perspective:

“1 – Pre-loaded content: start retailing iPods with either a significant amount of songs already pre-installed or with on-device credit for songs from iTunes.

“2 – A music subscription offering: premium subscriptions are dying a not-so-slow death. Apple could change that over night. But please Apple, don’t just play the Rhapsody / Napster game and offer portable rentals for ten dollars a month,” the analyst advises.

Mulligan then moves to offer a few ideas as to how Apple could make a music subscription service into something highly successful, advising a low cost, DRM-free model that actually offers users the chance to keep some tracks permanently – even at the end of their subscription.

From the analyst’s blog:

– Charge just a few dollars a month
– Have permanent downloads at the core of the offering (e.g. a fair use number of tracks rather than just a dozen or so)
– Subsidize the cost of the subscription in the price of a device (i.e. follow Nokia’s Comes With Music lead)
– Do DRM free subscription and include the cost in the device sale price
– Offer Pay as You Go, with ability to dip in for a day at a time (‘dip in for a dollar a day’) to help drive discovery and impulse purchases (the labels would love you for this, trust me!)
– Include music videos in the subscription mix

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