There has been a lot of speculation (almost bordering on FUD in some respects) about the future of iTunes, the iPod, and just about everything having to do with Apple’s music endeavor. Judging by some articles, you’d think Apple is actually in serious trouble and that subscription music services are swimming around Apple on their small raft like sharks going in for the kill. Well, this is what is going on (after all, Apple is currently the market leader), but only to a point.

The iTunes model is not dead, nor will it ever be, contrary to what some articles suggest. The subscription model will never take the market entirely, period. Let’s look at, for example, the magazine industry. Most magazines offer subscriptions on a (usually) yearly basis. Subscribers usually pay less per issue than those who buy it at the newsstand. But for some reason, people still buy magazines from a newsstand. Why? Because they have absolutely no need for all twelve issues a yearly subscription will give them when they only want one or two a year. Now apply this to music. Who is going to pay for $180 worth of music each year if all they’ll ever download is maybe $75 per year? After all, not everyone is a profuse music downloader, even with a fast connection. Everybody’s different; there should be different music purchasing options to fit different people’s preferences.

This is where the iTunes model comes into play. A lot of people point to the cost involved in buying 10,000 songs on iTunes versus a subscription service.But tell me; how many people do you know have downloaded 10,000 songs off of iTunes, or any service for that matter? Seriously. Have you? Because I sure haven’t. There are many consumers who buy only a handful of songs a month. So let’s look at a more realistic scenario.

Meet Stevie. Stevie downloaded 35 songs off iTunes last month for $34.65 (US) and burned them to CD so he’d have a backup of them. Meet Billy. Billy also downloaded 35 songs last month, but downloaded them off of Napster’s Napster-to-go service for $14.95 a month. Billy also wants to burn his music, but he can’t because Napster To Go does not allow it. To burn songs, Billy must still download his music using Napster’s Napster Light pay-by-the-song service and spend $34.65. (source) If Billy uses Yahoo!’s new servie he’d pay $4.99 per month, an even better deal--provided he decides to pay on an annual basis. But he’d still have to pay $0.79 per song if he wants to burn them to CD, which comes to $32.64, a mere two-dollar savings. If Billy is paying by the month (which offers more flexibility if he wants out but costs $6.99), he’d be paying $34.64, one cent less than iTunes. Whoopee. Of course, as Stevie and Billy buy more songs, the gap would widen in this scenario, but I feel 35 songs per month is fairly realistic.

The subscription model has its perks. It’s great for people who like to download lots of music, and is constantly deleting older music to make room for newer music, and have no use for burning to a CD (if you stop paying, though, you lose everything, especially in the case of Napster to Go). The subscription model isn’t necessarily a bad thing, but it is not the end-al be-all panacea that many think it is. Instead of one model overtaking another, I expect in the end that the two models will share the digital music pie fairly evenly.

I also don’t see Apple letting this industry slip away that easily. They’ve cut existing iPod prices and released a low-end flash player at an ultra-affordable price. And as anEEProductCenter article states: “Initially, Steve Jobs said that [a subscription service] would never happen. Last week, though, he acknowledged that, while he still doesn’t like the PlaysForSure approach, Apple’s non-subscription theology isn’t really a religion, meaning there’s some room for Apple to save itself.” If Apple can cover all the bases by offering both a very good pay-per-song service and very good subscription service, they’d be set. And I think Apple can do it.

The bottom line is this: everyone’s tastes and music-buying habits are different. It makes sense to have different approaches to music buying online. It would be foolish to discount the subscription model. But it would be equally foolish of people to declare that the iTunes model is doomed.

If only pundits and industry analysts would realize this.