iTunes season-pass model debuts

iTunes has long been a double-edged sword for the music industry – on one hand, it provided a model for selling digital music. On the other, the dominance of singles sales over album sales leaves a revenue gap that labels are still trying to close.

So some relief is greeting Apple's introduction of the new iTunes Pass model with veteran band Depeche Mode, which records on the EMI label.

Similar to the Season Pass model iTunes implemented in March 2006 for TV show downloads, the iTunes Pass lets artists sell a range of products for one flat price and deliver them throughout a given period of time.

As the first act to take advantage of the program, Depeche Mode is offering two exclusive singles to fans who sign up for the US$19 bundle, which includes a pre-order for the album. The new album, "Sounds of the Universe," will automatically appear in fans' iTunes library when it comes out April 21, as will a number of other new music and video titles between now and then, with additional content coming afterward.

It's a version of the album subscription model, which several artists have offered on their own for the past year. Rather than simply releasing a single album, artists are experimenting with upselling higher-priced bundles to loyal fans that they can pay for at the outset, and subsequently letting content trickle out for weeks, months or even a year. Those offering subscriptions include Metallica, the Dandy Warhols, Kristin Hersh and Josh Rouse.

"If you're a fan of any band, you want to get new content, you want to keep seeing something from the band," said EMI senior vice president of sales and commercial development Darren Stupak. "You're giving them something every two weeks. It's great because you're engaging the fan with content that's ongoing rather than having them search it out."

So far, the model has shown promise. A recent bundle of the Beastie Boys' reissue of "Paul's Boutique," in conjunction with EMI and the technology platform Topspin, carried a range of options, from a digital album for US$12 to a US$120 package that included a boxed set and download.

According to Topspin, only 16 percent of the resulting sales were for the cheapest option, and the average revenue per transaction topped US$50. Bringing the model to iTunes is a significant step, as other subscription offers are generally limited to artists' Web sites, where only the most hardcore fan discovers them.

Sources said there are at least two to three other acts ready to participate in the Season Pass program in the coming months.

"It's about being creative and testing new products," Stupak said. "The consumer decides what configurations they want. We've been an industry that had two or three configurations. Now we have different ways to offer consumers products. We're not telling them how to buy Depeche Mode. We're offering them different opportunities."

- Reuters