This morning news that Warner music was added to AmazonMP3 as DRM-free. (TechCrunch coverage) (Routers coverage)
A lot has been said written about how Apple became so dominant in online Music and how it is likely to stay there. In my opinion, Itunes will likely to always be a dominant player but will, over time, erode down to a 40% level at best. This may take 5-10 years but very likely to happen.
To back up this statement I want to go over a few areas. Firstly, one of the biggest trends of the recent years is that of fragmentation. Fragmentation in terms of how we access media. For example. Via our Computer, TV, iPod, Mobile, STB, game console or yet to be released products. All these products will not be building shop fronts to sell Music on. But you will expect to purchase music on them. So what is the likely result? Affiliate sales to a major online store. Could be Itunes. Could be Amazon.
This leads me to a big problem Apple and Itunes has. The very strong reluctance in interoperability. Interoperability is what the Web2.1 is all about. OpenSocial. Android. Facebook platform is also going open etc. This is where all the excitement is about. Implementing methodologies that anyone can connect to and utilise. (Within reason)
Apple’s DNA currently does not mix with these ideas very well. Apple does open WHAT IT NEEDS TO. An example of this is the IPhone with IPhone-hacking with Apple refusing to release an SDK until it has been forced to. The DNA can change!
The issue here is that Apple with its mantra of “all things must be controlled by Steve”, simply cannot service this future we know to be coming. However, a generic Web interface based on standards CAN. Ie, Amazon.
I would also like to mention the natural human desire to be different. As we drive so many different brands of car, shows we like to have choice.
I do not take into account the change in marketing trends on producers. It has been well documented by analysts that it is expected that producers are likely to go direct. Killing of the incumbent Gate Keepers. For example, the big record companies, or at least forcing them to become something different. Ie a marketing agents for music. This may also affect Itunes in a negative way. It could also be a big opportunity for Itunes as a portal or Marketing agent. However, the barrier to entry of this market will be very low and so very competitive. Dominance by any company is unlikely.
2 responses so far ↓
1 Philip Hodgetts // Dec 28, 2007 at 11:57 am
I don’t believe that Apple intended the iPhone to remain closed. They never announced that their would NOT be an SDK, just pushed developers toward AJAXy type efforts initially. Remember at that time Apple couldn’t get their primary OS out the door without a 6 month delay because of a lack of engineers. An iPhone SDK was really low on the priority list in early 2007 with an Apple TV and iPhone OS to be adapted from the core OS X.
I still think the integration of iTunes/Store/iPod is compelling for non-tech types (ie the majority) over the less integrated approach. Sure you can manage your Amazon purchases in iTunes (and have to to get them on an iPod) but it’s an extra step and most people won’t do it.
Of course, I could be wrong, when you’re predicting, about the only thing you can guarantee is that we are wrong some of the time (most of the time?)
philip
2 JamieG // Dec 28, 2007 at 1:40 pm
Philip,
Yes you make a good point about having the Itunes software being you hub. Ie, its similar to Microsoft and having Internet Explorer as part of the OS. Its unlikely that IE will NOT go below 50% utilisation simply because its too convenient. (Unless your more mindful about secutiry. But most users are not.)
Apple does not have the seeded dominance that Microsoft has with the OS, but its close.
I suppose the topic would have been more clear to say “Itunes dominance in Music will erode but they will still be dominent” 40% is, in my opinion, very dominent for a market that will have a lot of people trying to get into the space.
However, Philip, I still feel Steve will only give on opening platforms like IPhone as much as he has to. As long as he keeps the “Apple is a company for the Poeple” type marketing spin. I personaly think they are more for the market like any public company, and Steve is more about ego. (Not that this is a bad thing. We all have Egos.)
For example, Bill Gates is considered a masterful business man by some (Ie those who don;t mind being cut throat themselves.) while others (Considerably more in my opinion) consider him a cut throat evil captialist. And like my recent post on the Darth Vader humer story suggests. Hes probably feeling some of this heat. This is what likely drives his philanthropic efforts..
James
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