A new report observes Apple has put together contingency plans which could theoretically enable it to offer an ads-funded music service of some kind through iTunes.

The report doesn’t claim the company plans to engage in such a move – after all, as an a la carte download service Apple recently shifted its eight billionth track, and appears well on the way to selling as many as four billion tracks this year.

Distorted Loop cites information from UK music industry analyst’s, Music Ally. They’ve taken a look at a recent UK Copyright Tribunal case to uncover a series of hitherto unknown witness statements from Apple iTunes VP Eddie Cue, made in the course of the case.

His statements were sufficient Tribunal Judge Fysh QC, presiding, was driven to state in his judgement, “iTunes may well carry advertising in future”.
The Tribunal began in June 2005, when online services including Napster, AOL, iTunes and the mobile carriers joined forces with UK music industry association the BPI in an attempt to force change in UK licensing rules for use of music online and through mobile services. The primary disagreement concerned the royalty rates payable for various purposes.

A new rate was agreed, but Apple fought hard for exceptions to the rules made designed to facilitate launch of ads-funded music (note, this does not mean the company will do this, just that it could do, and has looked at the possibility).

Apple was able to present the Tribunal with a complete model of how it would like an ad-supported music service’s revenue structure to work. And its evidence was part of what compelled the Tribunal to make certain exceptions which could render this possible in future.

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