So… iTunes is now the #2 music retailer in the US, holding 10% of the market share, only second to Wal-Mart – which holds 20% of the market share. Many analysts project that by the end of 2008, iTunes will have overtaken Wal-Mart as the #1 spot. But what does this all mean? And how does it affect the consumer and the music industry?
In many ways, the creation of the iPod and the introduction of iTunes saved the music industry; but that in itself is a controversial statement. In the early 21st century, Napster ruled all and CD sales plummeted. I distinctly remember most of the record stores in my neighborhood closing. Then the music industry fought back, kicking Napster’s ass and beginning arrests of hundreds of teenagers; still today we are reminded on a regular basis that the cops might come knocking if we illegally download music (even though it’s not a realistic scenario).
So what’s the next best thing? Getting inexpensive, digital copies of the songs we love off the net and Apple provided just that! In 2001, the music industry partnered with Apple to allow the 99-cent song downloads, thinking it would do the industry good. And it did just that for many years. But now, the record labels are beginning to realize that the sales model of same-price for every song may not be the best. Is it truly appropriate to price a classic Beatles track at the cost of an up and coming artist? It seems not. But now that Apple has over 50 million costumers worldwide who have bought over four billion songs, we can be sure they won’t be willing to raise prices.
As ownership of music becomes less and less important, perhaps Apple’s bubble will be bursting sooner than expected—further expedited if the industry successfully forces Apple to raise it’s prices. Today, most consumers are satisfied with simply live streaming music off the net until they’ve overplayed it. Artists simplify the process by adding the music to their Myspace pages, allowing consumers to listen to the songs an unlimited number of times.
It’s hard to say what the future holds for the music industry. To me, the worst-case scenario would be advertisements placed directly into the songs. Could you imagine the only option of music as free and commercial-packed? Hopefully, iTunes will stay strong and the 99-cent song will prevail.
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