by Playfuls Staff |
24th February 2006
Apple has once again reached a place no one has ever gone before. After only 3 years from the appearance of the digital music download service, the iTunes store, credited with very few chances of survival in a period when piracy has been the word of the day, Apple has celebrated yesterday [more] the 1 billionth legal download.
You should keep in mind 2 things: 1 billion and legal download. The fortunate user who marked this milestone is Alex Ostrovsky from West Bloomfield, Michigan, whose 99 cents paid for the song Speed Of Sound by Coldplay brought him an 20-inch iMac, 10 5’th generation iPods and a gift card worth ten thousand dollars for purchasing even more songs from the iTunes store. Moreover, Apple will also invent the Ostrovsky scholarship at the famous Juilliard School of Music in order to mark the event.
Assuring Alex Ostrovsky that we’re very happy for him (and ok, a little bit envious), we get back to the two aspects mentioned before: 1 billion and legal. Is it so important that Apple has reached 1 billion downloads? In the past, it has also marked 500 million downloads, and it will most likely go way beyond 1 billion in the future. But the real major issue here is time. Apple has managed to sell 500 million songs in only 7 months, the previous milestone being reached in July 2005. This clearly proves that the number of iTunes users has increased at a phenomenal rate, and that the service’s growth will pick up even more speed.
Another important fact is that all the downloads are legal, Apple and its iTunes thus infirming the theory that users prefer pirated songs. So, we can see that, it there exists a legal and, more importantly, cheap alternative, a legal service could easily surpass, from the number of users and downloads point of view, even the infamous illegal P2P networks. Perhaps the RIAA should analyze this example and draw the necessary conclusions.
However, once the number of 1 billion has been reached, some other questions regarding the iTunes can be asked. Is there any room left for similar stores on this download market? What will be the fate of the iTunes if, in the end, music companies like Sony, Warner Music and EMI will really keep the pressure on Apple to increase the price of a tune? Will iTunes send the CD into oblivion?
Let’s try to answer these questions, one at a time. The darkest cloud for the iTunes is a raise in the songs’ prices. The illegal download market, even if hurt, is still a major threat, and if Apple decides to sell the songs at higher prices, customers will most certainly flee. So, let’s hope that Steve Jobs manages to keep the music companies at bay, especially because now he has 1 billion aces up his sleeve.
Will the iTunes get a rival? The latest rumors say that Amazon.com, whose reputation of the world’s biggest online retailer has been partially built on the sales of CDs, has started to negotiate with music companies and producers in order to launch a competitor for the iTunes. Nevertheless, as long as Amazon.com will create a rental service, rather than a purchase one, and won’t offer an alternative to the iPod, the efforts of bringing down Apple from the peak of 85% of the digital music download market are completely useless.
For Amazon.com, things are quite complicated, because the iTunes will completely demolish the CD in 5 years tops (and that if Apple doesn’t manage to launch versions of the iTunes in more than the current 21 countries even sooner), and a whole chunk of Amazon.com’s income came exactly from this sector. But the CD sales are going worse with each passing year, so Amazon.com is forced to come up with something. What? We’ll just have to wait and see.
Is the iTunes a monopolistic service right now? Probably yes, but, unlike in some other cases, Apple’s monopoly is one of quality. With intelligence, tenacity and guessing very well the market’s requirements, Apple has built the iTunes, a service no one is unhappy to use. So, see ya at 1 billion and a half!
