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That's true in ways both obvious - iTunes and digital downloads being Exhibit A - and not so. Take, for example, two of the more important drivers in the industry's brave new world: ringtones and social networks. Apple's iPhone stands poised to upend both models. In a recent conversation with an entertainment lawyer, I remarked what a surprisingly large source of income ringtones has become: $4 billion, $6 billion, $9 billion each year, depending on whose figures you trust. The lawyer scoffed. Limited shelf life, he responded, no future. Then he added: "You have the new iPhone, right?" I nervously fidgeted my Motorola before admitting I wasn't one of the cool kids. With the iPhone, he patiently explained, it's easy to convert any MP3 into a ringtone. "Talk to any 15-year-old," he advised. I did, well, at least, indirectly. It's happening, I was told. Sure enough, the Web's full of advice on free - and perfectly legal - ringtone creation, using iTunes and the iPhone. As we've written in the past, music-related social networks have become huge, at least in user numbers: tens of millions of listeners tune in. These are free services that mix elements of online radio with digital music streams, self-selection and peer recommendations. Media companies and venture capitalists have invested hundreds of millions of dollars in various networks, although just how any of these services make money is a mystery. One of the biggest limitations to even more use is lack of portability. They're stuck on your computer. Not anymore. Pandora, which despite its recent problems remains one of the most popular of these social networks, can now be loaded onto the iPhone. Not surprisingly, it's fast become one of iPhone's most popular applications, according to various reports. After all, listening to unlimited music anywhere, anytime, is right up there in desirability with a backstage pass to a Led Zeppelin reunion tour. That brings us back to the subscription rumors, which have bounced across various Apple-related blogs this week. According to Macrumors.com, an "anonymous tip" details a late-September launch by Apple of a yearly $180 subscription service. The service would allow listeners to choose from millions of tunes. They would be streamed to any computer with iTunes or, more importantly, to an iPhone. Macrumors and others caution that these reports are nothing new. The Financial Times, for one, ran a piece in March that suggested Apple was going to offer free access to tunes in return for an extra 100 bucks tacked onto the price of an iPod. So far, paid music services haven't set the world on fire. Yahoo! Inc. [YHOO] gave up on its offering earlier this year. The two current subscription services are publicly traded Napster Inc. [NAPS] and Rhapsody, a joint venture between RealNetworks Inc. [RNWK] and Viacom Inc.'s [VIA] MTV Networks. Napster's subscriber list totals only about 700,000. Rhapsody doesn't break out numbers, but revenue figures indicate there are about 1.6 million subscribers. The vast bulk of those can listen only on computers. Napster, for one, hasn't made a dime since it launched almost five years ago. The stock price has tanked so badly that cash on hand now surpasses market cap. The company is under intense pressure by hedge fund investors to either sell or liquidate. Attempts by Rhapsody and Napster to offer portable services using MP3 players have so far been disastrous. Both have recently inked deals to provide music streams via mobile telephone services. In theory, that would solve delivery problems. But it's hard to believe they can magically convince big numbers of new subscribers to sign on. Apple, on the other hand, should face far less resistance. If for no other reason, iTunes has huge name recognition. Tens of millions of individuals already use some form of iTunes. Add the cachet of the iPhone and Apple may be onto something big. Yet again. -- Matt Miller  Deal Video
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The last thing the world and Steve Jobs' ego (two similar sized spheres) needs is yet another paean to Apple Corp. [
