Let's face it, folks -- the CD insert is no longer "the new hotness." And besides, those wacky PDFs included with iTunes album purchases never did much more than take up valuable hard drive space anyway, right?. In an effort to get consumers to stop buying single tracks and start buying more filler entire albums, Apple has reportedly joined forces with EMI, Sony Music, Warner Music and Universal Music Group in a project that's being codenamed "Cocktail." Financial Times is reporting that said initiative is considering adding "interactive booklets, sleeve notes and other interactive features with music downloads," with one executive familiar with the situation saying that "it's not just a bunch of PDFs; there's real engagement with the ancillary stuff." Of course, all of this should still be taken with a pinch of salt for now, as even the music companies mentioned above refused to comment. And given the tremendous indifference consumers have shown with that other interactive tech that's being pushed so hard right now, we're not even sure it'll have the desired effect.

In related news, another sect of folks "briefed on the project" have stated that these new content deals could be launched alongside a new, full-featured "tablet-sized computer in time for the Christmas shopping season, in what the entertainment industry hopes will be a new revolution." Adding fuel to the already raging fire, the report asserts that the "touch-sensitive device... will have a screen that may be up to ten inches diagonally," and while it will "connect to the internet like the iPod touch, it'll probably [do so] without phone capabilities." You do know that Apple has been good for a music / iPod-related event right around September the past few years, right?

[Via AppleInsider]

We'd already heard through the gravevine that iTunes support would be baked into Palm's forthcoming Pre, but now it's official. During Palm's D7 keynote today in Carlsbad, Paul Cousino showed attendees that non-DRM music, photos and videos could be synced with the Pre via iTunes (on Mac and Windows, naturally). In his words: "It shows up in iTunes just like a regular device."

Update: So, Palm has issued an official press release detailing the new webOS features shown today at All Things Digital. The so-called media sync feature is straight up designed to "synchronize seamlessly with iTunes," giving users the ability to use Apple's media management software for transferring all non-DRM media. Furthermore, the Pre is engineered to act as a "mass storage drive," letting users side-load content on the fly. The full release also details the App Catalog and Twitter in Universal Search.

Probably more than any other facet of Apple, we've seen rumor after rumor regarding iTunes fade away in the sunset. Of course, many of those delightful plans were likely shot down by the likes of the MPAA, RIAA and other so-called content guardians, but we say all that in order to depress your hopes on this one. For whatever it's worth, an undisclosed source at CNET has confirmed an AppleInsider report that Cupertino is prepping an on-demand video streaming service for the next iteration of iTunes. Slated to be dubbed iTunes Replay, the service would purportedly "allow users to stream their iTunes video purchases directly from the company's servers for playback anywhere, anytime without eating up local storage." There's no denying that Netflix's Watch Instantly has been a universal hit, but that's in large part due to the firm's willingness to embed that functionality onto all sorts of devices. Is Apple planning on going toe-to-toe with the market leader via your computer and a box it still regards as a hobby? We've got our doubts, obviously.

[Via CNET]

We can't count the number of times we've heard from one random source or another that Apple was about to pull the trigger on a subscription-based / 100% DRM-free music service, and given how those have worked out in the past, we'd highly recommend taking this one with a huge dose of salt. French site ElectronLibre has it that Apple will finally offer up all of its music in DRM-free form starting as early as tomorrow, specifically calling out Sony, Universal and Warner as outfits who would join the protection-free cause. Should this happen, it would obviously be a dream come true for ole Steve, but we're still left to wonder what would happen to bitrates, prices and (potentially most important) all other iTMS content. Something tells us Hollywood isn't quite as ready to release its death grip.

Update: Don't hold your breath -- CNET says that while Apple is in negotiations with the bigs to go DRM-free, nothing's set in stone and changes are unlikely before the end of the year. Amazon it is!

[Via AppleInsider]

Man, you just can't win these days. So Apple offers up an energy-efficient, forward-thinking Mini DisplayPort on its latest MacBook / MacBook Pro, and now users that are still rocking displays sans HDCP-compliant HDMI / DVI ports are up fecal's creek without a paddle. Apparently select content in the iTunes Store is laced in HDCP, which isn't all that unexpected in and of itself; the problem comes in when you realize that the new unibody machines don't offer a VGA / VGA-to-component output, meaning that you have to connect it to an HDCP-compliant display if you want to see anything. We know, one word in particular keeps coming to mind to describe this fiasco: awesome.

It has been a solid tick since we've seen a good FairPlay hack, so it's with great pleasure that we pass along El Tunes for Ubuntu 8.04 users everywhere. Tested to work on Hardy Heron using RhythmBox (but assumed to work on any modern Linux Distro with GStreamer and a media player that utilizes GStreamer), said plug-in enables open-source aficionados to play songs purchased from the iTunes Music Store. As for limitations, the current version has no Pause / Seek support and cannot de-authorize a machine for playback, but a future version should hopefully cure those two quirks and add support for purchased video content and audio streaming to an AirTunes device. Give it a shot and let us know how it treats ya.

Color us completely unsurprised, but it's being reported that a number of state politicians are looking at the possibility of imposing new laws to levy taxes on digital downloads as a method of taping up shattered budgets. Yep, anything from music to videos to books are at risk, as a growing number of lawmakers are looking to start collecting taxes from each iTunes track and Kindle eBook you purchase. Of course, this idea is far from new, and a number of US states already impose such taxes, but it seems that the ever-growing amount of content purchased online has caught the eye of those looking for new streams of tax revenue. Needless to say, the issue as a whole is about as far from black and white as you can get, but we're not asking you to take our word for it -- tap the read link to get a good feel of just how sticky the situation really is.

[Image courtesy of Izzy]

Based on today's earlier leak of some weekly NPD marketshare data, we had our doubts that Apple had actually overtaken Wal-Mart as the number one music retailer in the US, but it looks like that January surge of iTunes gift cards and new iPod owners pushed it over the top for good -- and now we've got the PR to prove it. Apple's giving out the same "4 billion songs to 50 million customers" numbers as it has for a while now, but it says iTunes was the biggest game in town in January and February. Of course, there's a lot of 2008 left to go, so Wally might make a comeback -- it was the overall champ last year -- but Apple's achievement is still a major milestone for digitally distributed content, and we hope to see a lot more iTunes-like services on that list soon.

Although we aren't inclined to believe that this is the first time such a suit has been brought upon Apple, a new one claiming that the Cupertino powerhouse has unlawfully tied the iPod to its iTunes Store has made its way to the US District Court for the Southern District of California. The complaint was filed by a Florida resident on behalf of all Florida-based iPod owners and iTunes Store customers, and it basically alleges that certain limitations -- such as the inability to play content purchased through iTunes on anything not labeled an iPod -- is "unreasonable and illegal under Florida's antitrust and unfair trade laws." Furthermore, the plaintiff claims that Apple willfully disabled embedded support for rival formats, and stated that it was "in possession of monopoly power in the portable digital media player market, the online music market and the online video market." 'Course, it's not like those lawyers at 1 Infinite Loop aren't used to this stuff by now, and we really can't see this being the beginning of the end (nor a catalyst for rule changes) for the oh-so-mighty iTunes Store.

Movie rentals could be coming to the iTunes Store, if an apparent slip-up by Apple is any indication. Mac developer David Watanabe uploaded a screenshot depicting an iTunes problem reporting system which has options for requesting a refund due to non-delivery of rental movies. The other options for reporting issues with the as yet unannounced -- but rumored -- rental movie options on the iTunes Store include accidental purchase, poor content quality, duplicate purchase, wrong version, bad metadata, and "other." The same possible complaints are available for every other content type on iTunes. We verified that these options are still viewable on a US iTunes Store account: see for yourself by viewing your account purchase history, clicking report problem, and then clicking on an individual purchase.

[Thanks, Josh]

Joining Sony Ericsson in the growing list of cellphone-related patents unearthed today, it appears that Apple is doing a good bit of work behind the scenes to ensure that future iPhone users will be able to access and purchase tunes (and video?) from the iTunes Store. Apple's recently filed "Configuration of a computing device in a secure manner" patent lays out in a good bit of detail how users of a mobile device (wireless iPod?) could access the iTMS and perform "transactions." It goes on to speak of "digital signatures" that would presumably have to be validated before any unexpected downloads took place, and it also pictures a handset (props to Nokia candybars of days past) communicating with an actual PC, which then contacts the "content and commerce" servers on the other side of the wire. In other details, there's photo evidence that some sort of downloadable upgrades / expansions could be available, probably referring to future firmware updates that could be initiated through the iTunes application. Granted, the whole mess of legal jargon is a bit hard for the layman to truly grasp, and it seems that Apple was simply throwing out as many vague words and possibilities to encompass anything that actually gets decided, but be sure to hit the read link anyway for more textual confusion and pictorial delight.

It wasn't too long ago that ole Steve opened a few of his famed keynotes boasting about just how much money was flowing into the iTunes Music Store, and now we've even got the option to snag feature films and TV shows if our wallet so desires, but it appears that even the streamlined, previously trendy iTMS may be on the decline. It's no secret that folks looking to pick up some new tunes would like to avoid DRM at all costs, but instead of seeing CD sales skyrocket, there's simply been a general decrease across the board in the whole "music buying scene." While digital downloads initially looked to fill the void, that theory seems to have been short lived; since January, the monthly revenue going into Apple's iTMS has fallen by "65-percent," with the average transaction size falling "17-percent." Notably, it's not just Apple suffering the cashflow drought, as Nielsen Soundscan reports that the digital download "industry as a whole" is steadily declining. Additionally, research has shown that the "median household" spent just "three dollars" about six times per year, showing that digital downloads aren't exactly "replacing the CD," but rather complimenting hardcopy sales at best. Interestingly, analysts are theorizing that the DRM-era may actually be winding down in favor of "blanket licensing," which was cast aside just years ago in favor of the "per purchase" approach. Discussions are already taking place in the UK to test the waters of such a bundle package, but we don't realistically expect the business model here to change overnight -- but considering the duties the RIAA wants to toss on anything digital, we wonder just how attractive a new plan will be.

UPDATE: Based on Forrester's reports, the data cited was from the first six months from the previous year, which leaves open the possibility of seasonal swings skewing sales.

We aren't exactly sure who's getting the shorter end of the stick in Universal Music's "deal" with Microsoft to extract a set fee from every Zune sold, but now its oh-so-mettlesome CEO is thinking of putting the same pressure on ole Steve. While Jobs has certainly had a rather sour relationship with the labels over the years, and has flat our refused to boost music prices (twice) at the iTMS, this predicament could be a fair bit stickier. Doug Morris is reportedly considering asking demanding a royalty fee from every iPod sold now that he's already won the war over at Microsoft, touting Universal's massive music collection on iTMS as something fairly essential to the program's continued success. But things aren't as clear cut as the previous deal, as the Zune Marketplace was (and still is) in a position trying to grab any sliver of market share it possibly can, while Apple's rendition basically owns the digital download realm already. While it's easy to assume that both companies will agree on a ridiculously small fee just to save face, it begs the question of other labels trying to cash in at Jobs' expense if this deal goes down -- but hey, what goes around, comes around, right?

Remember those "cringingly blurry" photos we published a few weeks back that supposedly depicted Microsoft's long-rumored iPod-killer? Well it looks like our tipster may have been right on the money with his assessment, as Reuters is reporting that "sources familiar with the plans" have confirmed that Redmond is indeed working on a portable media player, along with an iTunes-like service to feed it content. Although the informants didn't give much info on the hardware (none at all, really), the service is apparently looking to differentiate itself from the iTMS by encouraging users to hang out and community-build (how Web 2.0), and while it will offer a subscription option a la other PlaysForSure-powered sites, the main focus will be on the pay-per-download model. A Microsoft-branded service may come as a bit of a surprise to some folks considering past licensing issues the company's had with the labels, along with its recent involvement in launching MTV's Urge, but we know at least one person who's seen this coming all along.

P.S. Not that this helps you out much, but we can say that we actually caught a glimpse of whatever this device is, and so far, we like what we see.