The iTunes store has been the one-stop shop to get your legal download on for almost 9 years now. While the RIAA was busy handing out lawsuits, Apple decided a different approach. Instead of fighting a technology that was not going away anytime soon, they decided to embrace it. This very fact is what sets Apple apart from other companies – they are forward thinking, while others are just following their lead (MS, I’m looking in your direction). Out of this era, the now ubiquitous iPod was born and along with it came the iTunes store.
While iTunes has evolved over the years, think genius and smart playlists, the iTunes store mostly has stayed the same. Sure, as of April this year, they finally have changed the pricing structure of some songs, .69 cents for lesser know songs, and $1.29 for the more popular songs, but most are still priced at .99 cents. While I’ve heard that there are some songs out there at .69 cents, I sure haven’t seen any, and I frequent the store often. While I applaud their move to a more varied price structure, I’ve wondered privately why they haven’t been more aggressive in lowering their costs. I guess they haven’t needed to because they are the eight hundred pound gorilla and still hold a considerable market share. The main problem about being in this position is that you don’t always have a good pulse on what your competition is doing and risk either becoming complacent and/or just out of touch with the current market environment. I'm not accusing Apple of being either at the moment, but they might be banking too heavily on brand loyalty with out thinking about the customers bottom line. Remember, money talks, and this tough economic climate, all bets are off when it comes to this line of thinking.
A couple of sites have been catching my eye lately, one of them being the Amazon MP3 store. Lately, they have been putting up daily deals for new (and old) releases that range anywhere from 1-4 dollars. Every now and then there are some great finds, but it was not until last month that I would have to say that the Amazon store has found its sweet spot. They advertised 50 albums for $5 in May that featured such artists as Kanye West, Metric, Death Cab For Cutie, and Marvin Gaye. This month they have the same type of deal with picks coming from their editors. In case you're wondering, I do check this site daily:). There’s another site that I am really starting to like, called Amie Street. This site, I think, has the potential to be the next big thing. As of right now, when a new album is released, you can download it for free (or at a very minimal cost). Based on the album/songs popularity, it goes up in price with a cap at .98 cents a song. Their main focus right now is Indy based, but that might change over time.
Given the buzz that is flying around the interwebs over these two sites, I would definitely be worried if I was Apple, because people such as myself are finally starting to go elsewhere. Although the iTunes store is still king, I would say that the two sites above offer a glimpse into the future that should keep things interesting, namely site loyalty and much needed price wars. Let the games begin!
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My understanding has always been that the iTMS is the product of an uneasy collaboration with the RIAA labels sold there. Kind of similar to the ongoing Apple vs AT&T battle over iPhone stuff. Word was that Jobs fought hard for the "one price" model at 0.99, when the labels wanted to raise the price of popular singles.
Apparently tiered pricing was a concession made by Apple in order to get the labels to allow DRM-free singles.
Amazon has had RIAA tracks for cheaper, and without DRM, for a while. So too have a few other lesser-known stores. Rumor has it that the RIAA was intentionally granting more permissive pricing and DRM agreements to non-Apple stores in a bid to promote competitors to Apple. If Apple were no longer the undisputed king, the RIAA would have more leverage over Apple when it came to pricing and such.
I'd take all of that with a grain of salt, and it's probably worth googling a bit for veracity's sake, but the story fits with the picture I have of both Apple and the RIAA.
Monopolies are rarely good for consumers, and we'd have to assume that challengers to the iTMS should be a good thing. Still, the bigger monopoly here is the RIAA, and the challengers I'm rooting for are the indy labels, CD Baby, and their ilk.
As always -- great post Pinto. I can't believe I forgot about the riff that Jobs had with the RIAA. Doh!