Apple, Record Companies Discuss Changes to iTunes Service

Apple’s recent discussions with record companies may soon allow iTunes customers to use the music they’ve purchased more flexibly across several devices. 

Apple first started selling music through iTunes in 2003. Its popularity skyrocketed, claiming the title of top U.S. music retailer in 2008 and possessed 69 percent of all digital downloads in the U.S. that September. Music companies, on the other hand, have had problems with declining compact disc sales in recent years. In 2010 alone, total album sales dropped 12.7 percent while digital track sales rose 1 percent.

Now, Apple is having private meetings with record companies like Sony Music Entertainment, Warner Music Group Corp., Vivendi SA (VIV)’s Universal Music Group and EMI Group Ltd. in order to change the way iTunes users access their music.  

The new plan would allow iTunes customers to permanently backup music they purchased in the event that the original versions are lost or damaged. In addition, downloads to multiple devices like the iPod, iPad and iPhone could all be linked to one iTunes account, which provides universal access to centrally stored content on the internet. 

Apple and the record companies decided to come together in an effort to “maintain demand for digital downloading” and to compete with internet services like Pandora Media Inc., which allows users to stream songs from the internet on multiple devices instead of selling individual tracks. 

Tom Neumayr, spokesman for Cupertino, California-based Apple, and other spokespeople like Amanda Collins at Warner Music in New York and Liz Young from Sony Music have declined to comment on the negotiations between Apple and the record companies. An announcement is expected by midyear. 

In other news, Apple is also looking to revamp its MobileMe service, which is a subscription-based collection of software and online services. One of the new plans would offer the normally $99 MobileMe service for free, allowing users to store various types of content like e-mail, contacts and photos on Apple’s servers. 

Changes to both the MobileMe and iTunes services will be accommodated by a new $1 billion data center in North Carolina, which will be a “hub” specifically for these Apple services.