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Why the iTunes Store succeeded

Christopher Breen | April 29, 2013
The traditional tenth anniversary gifts of tin and aluminum are appropriate for the iTunes Store. Both durable and somewhat flexible, the iTunes Store has become the preeminent place to purchase music. Still, if not for the unintended assistance of a bungling music industry, the store might have been as ephemeral as iTunes’ social service, Ping.

Apple to the rescue

Then, in walks Apple with a compelling idea: People who are motivated to steal music will continue to do so. But if you make stealing more trouble than it's worth by making digital music easy to find and purchase, and you price it reasonably, the vast majority of people will choose to buy rather than steal. And so was born the iTunes Music Store.

When it launched in April 2003, the iTunes Music Store was available only to Mac users, but Windows support was added that October. And, year after year, Apples store grewin capability, catalog size, and number of salesuntil the point where, with the addition of videos and eventually apps and books, it became simply the iTunes Store.

Where it all leads

History now under our belts, the question remains, why did the iTunes Store succeed where other servicessuch as those from Virgin, Sony Music Entertainment, Universal Music Group, EMI, and Time Warnerfail?

Certainly the music industrys inability to come up with a single strategy that served all labels, as well as its stubborn adherence to protection and prosecution, left Apple a very large hole to hop through. But, as with Apples other greatest successes, it was the companys ability to control all sides of the business that helped it succeed. It controlled the cloud-based store. It created the client that people would use to purchase the musiciTunes (which Apple wisely gave away for free). And, above all, it owned the most popular music player of the time, the iPod.

While other companies struggled to cobble together music services that clumsily delivered heavily protected music to a handful of third-party also-ran music players, Apple owned and operated all the component parts. The only thing the company needed was the consent of the content owners. To our benefit (and to the ultimate chagrin of the music labels), record company executives failed to grasp the potential of an ecosystem that provided easy access to music at a fair price, played on historys most popular portable music playerand they allowed Apple to license their music.

Browsing artists in an early version of the iTunes Music Store.

It caught on.

Happy as those executives were when ever-juicier checks rolled in, that happiness dissipated when the labels felt their control slipping away.

Sure, youre selling lots of singles for 99 cents and albums for 10 bucks, but we think popular tracks should go for more, they said. We demand the right to price music as we see fit!

To which Apple replied, No.

Well leave! they cried.

Go right ahead, responded Apple. But before you do, recall the pickle you were in before we saved your butts.


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