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Wednesday, April 11, 2007, 01:45 pm PT (04:45 pm ET)

CNN dusts off iTunes subscription service rumor

Though the rumors have never come to pass, CNN through its Media Biz website on Wednesday raised new evidence in revisiting the prospect that Apple may soon announce a monthly subscription service for digital music downloads through iTunes.

The media outlet cited Les Ottolenghi, chief executive of INTENT MediaWorks, a digital distribution system that works with peer-to-peer networks, as saying that he’s had meetings with people from Apple and believes the company will announce a subscription service for iTunes within the next six months.

"I think Apple is seriously considering a subscription offering right now even though they will probably tell you otherwise," he said.

While subscription services from iTunes rivals Napster, Real and Yahoo have done little garner interest, Ottolenghi argues that consumers aren't necessarily averse to paying monthly subscriptions. Instead, he claims music fans haven’t embraced the model because Apple doesn't offer it as an option.

Phil Leigh, a senior analyst with Inside Digital Media, seconded the notion. He claims the number one factor retarding the acceptance of the subscription model is the sheer dominance of the industry by Apple.

"Record labels would like a subscription service. They, like anyone else, like recurring revenue. Ringing the cash register every month is a beautiful way to run a business," the analyst told CNN. “But I don’t think they are going to do it because Jobs has said he’s against it and I believe that most of the time we should take people at face value unless we have compelling evidence not to."

Still, Ottolenghi is reportedly high in his convictions that Apple will eventually offer a monthly subscription model alongside its a-la-carte and album sales models, if only to increase iTunes usage amongst illegal file-sharing dwellers.

"With peer-to-peer, there are 2.5 billion downloads per month compared to Apple taking three years to sell 1 billion songs on iTunes," he said. "That’s a big difference."