James Delahunty
26 Oct 2005 2:33
According to iTunes Vice President Eddy Cue, Apple's biggest competitor in online music downloading is P2P. iTunes launched in Australia yesterday, giving Australian people what Cue says is an alternative to illegal music downloads with a fair price. Songs in the Australian iTunes store will cost $1.27 each ($12.86 per album) and music videos will cost about $2.57.
"Our view is that our biggest competitor is illegal music and P2P services. We always thought that if we offered a better alternative, then those customers would be happy to pay," said Cue. "Obviously...we will never be better than 'free.' But we think $1.27 (1.69 Australian dollars) is a very competitive and fair price to pay." Cue hyped up Apple's iTunes music store, repeating its worldwide success again.
"We have now sold over 600 million songs worldwide and have nearly 80 percent market share in most of the countries we are in," he said. "This is our 21st time, and I will say that there is no place that we have ever launched where music downloads have been strong prior to us." He also has a belief that the next generation of music buyers will see music as "digital bandwidth".
"It is certainly our belief that digital music buying is the future of music purchasing. Certainly our customers love it, and you can see it in the younger generation. They buy a lot of music now, and they buy it all online. That is what they know music as. They certainly do not know music as a record or as a CD--they know it as digital bandwidth," Cue said. However, should Apple really get the credit for the popularity of music downloading?
Yes, iTunes does have 80% of the market share in most countries it operates in, but would iTunes be any way successful if it wasn't for P2P in the past? If there was never the original Napster, or controversy over free music file sharing and iTunes had launched in 1999, how much different would the success of the store be? Would it have taken longer to convince people that downloading music is a good thing to do or even created anything near the "buzz" that "sharing music" created?
If you look back through the past few years, you notice that P2P is what brought about the joy of digital music on a worldwide scale and now that it has increased to phenomenal popularity, it would be easy for companies like Apple and RealNetworks to cash in off legal stores now that P2P has "proven" digital music downloading to be an easy, fast way to get music. Many file sharers download hundreds or thousands of songs for their collection, not like those who purchase CDs, who probably only get a few new CDs per month at most.
If you were a file sharer who had a collection of over 1000 tracks and one day, for some reason, all your downloaded music files were gone and you decided to switch to a legal alternative instead, you probably wouldn't buy the same number of tracks, but you would probably buy more than people who just discovered digital music downloading with iTunes and never used P2P networks to get their music. This is just because you are used to having a large number of songs and probably discovered a lot of new music when you downloaded it for free. You are much more comfortable with digital music.
However, the music industry cannot deny that Apple has pushed legal music downloading forward. Apple did make it easy to purchase music downloads and to add more fuel to the fire, cleverly tied the iPod and iTunes music store together. Apple also realizes that this still is just the early days of legal music downloading, so keeping a blanket price for tracks is the best option - a fact that certain major labels don't seem to understand.
Source:
News.com