Over the course of its ten-year existence, the iTunes Store has evolved even as it has stood stock-still. Starting out as an online store that sold protected digital audio files, it expanded to include sales (and, in some cases, rentals) of movies, TV shows, apps, and books (both audio and electronic). Where it remains unbudged, though, is in its central mission: Sell, sell, and sell some more. Whether the purpose of its selling is to feed the hardware that Apple makes or to turn a profit on the media itself, the iTunes Store differs very little at its heart from the large "music, movies, books 'n' things" emporiums of old.
The store has been quite successful for Apple--to the point where the company now talks less about it as a way of getting people to purchase the next iPod or iOS device and more as a profit center. Just this week, for example, Apple announced that its total revenue from the store topped $4 billion in its fiscal second quarter, with $2.4 billion of that amount coming from media sales.
As much success as Apple has enjoyed, is the model of the past ten years viable for the next ten? In my view, no. Two factors have altered the landscape: the changing attitudes of today's media consumers, and the competition that Apple faces.
The value of media
In the old days, if you wanted the latest music, you high-tailed it down to the Record Boutique and laid down your newspaper-route money for the latest Uncle Bob and the Weasel Brothers CD. And, in your mind, the music had unquestionable value. "This CD costs $14, and that's what it's worth."
The advent of illegal file-sharing services such as Napster chipped away at that notion of value. Suddenly music was freely available to those who knew how to get it, and justification for taking it came in the quart can, so why not? The Recording Industry Association of America presented its counterarguments in the form of intransigence toward the new technology, and lawsuits that generated outrageous damages awards to the RIAA levied against unlucky sharers; but it didn't demonstrate that stealing music was wrong--only that it could be risky. Apple's "Hey, we'll make it easy and inexpensive" approach was gentler, but it may also have helped undermine the notion of an artist's work as something more than a tune you could pick up for a buck.
Pandora's iPhone app
Illegal downloading is hardly the only factor that has altered attitudes about media's worth. Free streaming services like Pandora and Slacker offer better (and more configurable) fare than you can get on the radio; their commercials also happen to be shorter and, in some instances, less frequent. Spotify and its ilk demonstrate that if you're willing to cough up 10 bucks a month, you need never purchase another song in your life. And thanks to video subscription services like Netflix, we're increasingly accustomed to turning on the tap to view TV shows and movies we like.
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