Fresh on the heels of last week’s Financial Times story that Apple might start selling its entire iTunes library for a flat fee came the rumor explosion, its flames fanned by many respectable news sources, and, well, us.

Now comes the response from Apple: Not so fast.

The original story reported Apple to be in talks with the major labels over bundling an all-you-can-listen subscription plan. Customers might pay a premium on iPods and iPhones for unlimited access to major label music, for as long they owned the device.

Subscription to music sites usually means DRM, which Apple seems to be against. Also, some of us couldn’t fathom Apple releasing its entire iTunes library for as little as twenty bucks.

Businessweek calmed the waters with a story printed on March 20 which cites anonymous sources inside Apple who say they are merely exploring a number of options, including a subscription plan.

What we know for sure: sales numbers for iPods are no longer meteoric in nature—a 5% growth rate last year versus a 50% growth rate the year before.

There’s also some potentially weighty competition on the horizon. Facebook and MySpace both have music stores in the works.

So maybe Apple needs a new business model to sell new iPods, and maybe marrying them to unlimited access to iTunes is a way to do it. Time will tell.