Forrester Research Analyst Mark Mulligan has three things to say to EMI, who earlier this week voiced concern about iTunes’ dominance of the digital music marketplace: “I told you so; It’s your fault; Forget iTunes.
From his blog post:
I told you so. We’ve been warning the labels about the overdependence on Apple for years. Not just because of the pricing and competitive concerns a dominant player brings but because of Apple’s motives. Apple is in the business of selling hardware. Music has been a useful tool to help them do that. But they’ll change tack as soon as it suits them. Heck, these are the guys who started out their music strategy with ‘Rip. Mix. Burn.’. Yet the more cantankerous the labels get (e.g. giving everyone else MP3 licenses before Apple), the more Apple will look elsewhere. cf the iPad, a device which should have had music embedded in its DNA to drive a new generation of music products but instead becomes a Holy Grail for book and magazine publishers.
It’s your fault. If the labels had got their licensing acts together sooner other services would have gained traction creating a more balanced competitive marketplace. Instead when Steve Jobs convinced the labels to humour him with his Mac only iTunes ‘lab test’ contemporary services didn’t even support MP3 players. That’s right, you paid to download tracks that only played on your PC. No wonder piracy boomed. It took Jobs & co to change that, and the rip-roaring success of the ‘lab test’ saw the iTunes Music Store come to the PC. The rest is digital history.
Forget iTunes. At least forget the iTunes 99 cent download store. And indeed Amazon, 7Digital and the rest. The 99 cents download is a transition technology with an eye on the future but with its feet stuck firmly in the past. Consumers value access to content not paying for units of content. They value high quality, interactive, on-demand social experiences. The 99 cent download model is a useful tool for transitioning between the distribution era of the CD and the digital consumption era, but nothing more.