Can anyone stop the dominance of iTunes?

December 4, 2008

**Tom Dunmore is Editor-in-Chief of Stuff magazine. The views expressed are his own.**

tomdunmoreeicstuffmagazine2Amazon’s music download service has finally arrived in the UK. That’s great news for music fans, who will benefit from lower prices and greater choice – but it’s not going to save the music industry from the dominance of iTunes.

After all, Amazon’s download service has been running for a year in America, but it’s still way behind iTunes. In fact, even if you add all of Amazon’s CD sales into the mix, iTunes is still bigger.

Here in the UK, iTunes has well over 50 percent of the music download market (some put the figure as high as 80 percent). And that’s despite Amazon’s biggest online rival Play.com selling MP3 music at knockdown prices for the past six months. Why? Because neither Play.com nor Amazon can match Apple’s integration of iTunes software and iPod hardware.

More importantly for the music industry, despite all the new rivals in the download market, there’s nowhere near enough music being sold to make up for the slump in CD sales.

The last figures published by the BPI, the UK’s music industry body, showed that total year-on-year album sales were down 5.5 percent. Digital sales were up, but not enough: 7.5million less CDs were sold in the first nine months of 2008 compared with the same period in 2007. Download album sales were up less than 3.5m.

And that was before the economic downturn really began to bite. To compound the music industry’s woes, the UK high street’s biggest music retailer, Woolworths, has gone into administration – along with its music distribution arm Entertainment UK.  Supermarkets are having to source their CDs direct from record companies, and megastore operator Zavvi has been forced to cancel all orders through its website.

It’s not all bad news for consumers: the treacherous market conditions have forced the music industry to do away with the Digital Rights Management (DRM), which limited how music could be played and made most download music incompatible with the massively popular iPod.  The end of DRM means that Amazon, and Play.com can offer their entire catalogues in ultra-compatible MP3 format – unlike iTunes, which still sells some songs with DRM.

Amazon’s entry to the download market will help push down prices, too – much has been made of Amazon’s £3-per-album introductory offer. But while price is important, it’s by no means the killer issue online – after all, the easy availability (and overwhelming popularity) of free music illegally downloaded from peer-to-peer services makes ‘bargain’ £3 albums a pretty tricky sell.

The key to Apple’s success has been convenience and ease of use: you can buy music in the same software you use to listen to music – or even buy it directly from your iPod. Until Amazon can produce something quicker and simpler than iTunes, it’s destined to be a bit-part player in the download music market.

Read Tom’s blog at www.stuff.tv/blogs/future

Comments

Wise words but what’s with selling stuff in MP3? That format’s older than many of the people buying it!

Ideally iTunes would sell the other 70% of it’s catalog in DRM-free AAC then again, as long as iPods are the best-selling players, the DRM’s only a hypothetical problem.

Let’s hope the other music labels realise there is no real market outside of iTunes and let Apple make the switch as EMI have.

McD

Posted by McDave | Report as abusive
 

You may want to check out getsongbird.com. They offer a cross-platform, opensource alternative that plays Apple’s proprietary music files.

Posted by Mark | Report as abusive
 

Suppose this doesn’t concern me too much. I would never get a player that locked me into one supplier or one label. From what I’ve heard via my son, the ipod sound is pretty awful, fine for pop dross in a noisy environment but not for serious listening.

Posted by Dane Aubrun | Report as abusive
 

“Can anyone stop the dominence of iTunes?” Answer, yeah why not, it’s rubbish. I needs updating every 5 minutes, sucks the life out of a windows box, uses a proprietary format, and isn’t very cheap.

Posted by scoops | Report as abusive
 

Well, it’s not all about music; there’s video, podcasts to name but two.

They (iTunes) sell those very competitively; for example, got Wanted, Iron Man and Kung Fu Panda all cheaper than if I’d gone to the shops or even bought these online.

Also there are podcasts – some of which are the best around. Take the French one (the French Ecole, http://www.frenchecole.com). Excellent podcasts, clear and concise, with the website even better as they have pdf files that you can download the courseware.

Simple, iTunes gives a lot others don’t; just need to tweak it a bit Apple!

 

Beyond the iPod/iTune integration, success can also be explained by the sheer ease of use, whereas other online retailers of music have this strange belief that clients are ready to jump throgh hoops to have the priviledge to give them their money.

Find a song, video, podcast or movie – click – there it is. Even my technologically-challenged mother handles it without hesitation while her microwave oven still flashes 12:00 from the last power failure.

My experience is that many competitors who complain about Apple products also pay little attention to details in their product design: They expect you to adapt to them, to quirks and inefficiencies. And Apple has always been a great leader in design.

So until someone comes up with a more intuitive interface, an easier way to do what you want to do without pondering how to do it for minutes or hours, I am confident that iTune will lead the market.

Posted by Pat St-Arnaud | Report as abusive
 

Relationship marketing is another factor, iTunes keep you updated with changes, recommend songs, podcasts and shows etc that they think you will like and the new genius feature creates a personlised playlist of your music, iTunes will continue to rule the roost in this market as long as no other company offer more P

Posted by Louise Grove | Report as abusive
 

Let’s not forget that Apple is not in favour of DRM and the CEO has publicly spoken on multiple occasions of the desire to move to all DRM-free downloads. It’s the labels that have and are continuing to prevent this from happening.

Posted by Jay Tyler | Report as abusive
 
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