April 28, 2003

Apple's New Music

Marc Canter muses about Apple's new online music store, and about how it is peculiar that much new computer innovation is taking place on the Macintosh--when the market for Macintosh software is less than one-tenth as large as the market for Windows software. I agree: it is peculiar.

Marc Canter: "An online music store that lets customers quickly find, purchase and download over 200,000 songs from music companies including BMG, EMI, Sony Music, Universal and Warner Bros. for just 99 cents per song, without subscription fees, the iTunes Music Store allows burning songs onto an unlimited number of CDs for personal use, listening to songs on an unlimited number of iPods, playing songs on up to three Macintosh computers, and using songs in any application on the Mac, including iPhoto, iMovie and iDVD."

Oh well - I was hoping for a significant price break.  But at least they got the terms concept down.  Pretty hard to get customers excited about buying something if they don't get to keep it. 

The "appliance" engineering at Apple is clearly going to be the future of the company.  The combination of their OS X, an expanded line of appliances and smart Rendezvous-driven Home LAN positioning - will keep the Apple brand alive for many moons to come.

In fact I'd say Apple will be the perfect model for us moving forward - for the other 95% of the market.  Just recreating the Apple experience on PCs - will be an industry.  Brent Simmons and Robb Beal were given "innovation awards" at ETCON for their products on the Mac.  Clearly all the hottest innovation - is coming out on the mac - first. 

But as I said to Brent's and Robb's WIVES - "if you ever wanna send your kids to college, you better make sure your husbands port their products to Windows."

Posted by DeLong at April 28, 2003 09:16 PM | TrackBack


Um, IMHO, there's a big problem with Apple's new music venture. I was watching the Nightly Business Report on PBS, waiting for the Newshour to come on. The reporter said that Apple was going to charge $.99 for each download but no subscription fee. Uh, if I download an album's worth of music, say, 10 songs, I have just paid 10 bucks (close enuf)for that album. Yo. Apple. What's the difference between me going to WalMart and paying 10 bucks or downloading it from you? You're missing the point here. You want to eliminate the FREE downloads. Well ok, make it worth a downloader's economic while. Charge $15 a month for unlimited downloads. You (and the RIAA) gets $150.000 a year that you didn't have before from a potential customer base of at least 10 million downloaders. The downloader pays for music that was heretofore free at reasonable price that he/she is willing to pay.

At $.99 a song, it ain't gonna happen.

But that's just my opinion.

Posted by: vachon on April 28, 2003 10:13 PM


The difference is that you may not want all 10 songs on the CD. If you only want 6, then you save $4. If you want 1 song, then you've saved $9.

But if you buy the CD somewhere else, because WalMart doesn't sell most music, you're way ahead, because you didn't pay something absurd like $17.99.

My parents are going on a 3 week drive across country this summer. I'll probably burn a CD with country music for my mother to listen to on the road. Without Apple's service, I'd have to buy a bunch of CDs, and end up shelling out $100 or more to get the songs I wanted. With Apple's service, I only need to shell out $.99 per song, so $10-$20. That's a *huge* improvement.

Posted by: jon h on April 28, 2003 11:31 PM

"Marc Canter muses about Apple's new online music store, and about how it is peculiar that much new computer innovation is taking place on the Macintosh--when the market for Macintosh software is less than one-tenth as large as the market for Windows software. I agree: it is peculiar."

What's peculiar about it? When you have a monopoly, what need is there to innovate? When any potential innovator lives under the threat of being "embraced-and-extended" upon by you in the future, what point is there in going on?

The administration's insistence on snatching defeat from the jaws of victory in the Microsoft antitrust trial is one substantive -no, grave - black mark against its' record. Why Paul Krugman doesn't concentrate his ire on legitimate issues of this sort is beyond me. Does he have some sort of tie to Microsoft himself?

Posted by: Abiola Lapite on April 29, 2003 02:22 AM

So *groan* when do we get this service in Europe?

Posted by: Andrew Boucher on April 29, 2003 03:21 AM

jon h - use your local library. With mine, I search their catalog on the web, place orders for items, and get an e-mail when they're ready. I just go in and pick them up at the desk. Combined with inter-library loan, this gives access to anything but this year's releases (for which you'll have to wait a month or two, due to demand).

Posted by: Barry on April 29, 2003 05:49 AM

OK. So last night I downloaded iTunes4 (and Quicktime 6.2 since you need that, too) and took a look at the Music Store.

First disclaimer: If I knew what would sell and what wouldn't, I'd be a lot richer than I am.

Nonetheless, I took a look at the classical section and am not impressed. Donizetti's _Annna Bolena_ is 26 tracks. So it'll cost me $25.74 to buy the opera (there's no option to just buy the album, you have to buy it track by track). Simon Rattle's version of the Mahler 2nd ("Resurrection"), on the other hand, can't be bought track by track (since the tracks are too long, I assume) and I must buy the whole thing as an album: $23.99.

Second disclaimer: What I don't know about current popular music would fill a book.

On the pop side, I looked at Springsteen. In most cases, whole albums weren't available, nor all the contents of albums. Just the tracks they think you'll buy. I tried looking for Queen, but the search engine didn't bring it up: Queen Latifah, Queensryche, and some others, but no Freddy Mercury.

So I closed the thing down without giving them my credit card number and went out for a walk.

Posted by: jam on April 29, 2003 07:33 AM

Well, from the flip side of jam's perspective, I'm pleased thus far. It's odd that classical music is working as described - everything on the rock side is $9.99 an album, no matter how many tracks (no idea how they deal with 6 song albums from the 60s). For some albums they seem to identify as "partial", but they have all the appropriate tracks; dunno what that's about.

Anyway, I've already gotten set up at home and work, and have downloaded 2 songs (trying to pace myself). Now I'm a completist, and generally like to buy whole albums - liner notes and all - but there are plenty of exceptions. For 15 years, I've wanted "Institutionalized" by Suicidal Tendencies ("All I wanted was a Pepsi"), but would never shell out for a whole album. Now, for $.99, I have it. Beautiful.

The gaps in the catalogue are, I expect, temporary. If this takes off, then it won't be long before 90% of what's out there is available (perhaps not nearly so high a rate in some genres, like classical - where there are 20 widely available recordings of specific pieces - but for modern-era, performer-driven music, it'll all be there).

The interface is, of course, a delight.

Posted by: JRoth on April 29, 2003 10:18 AM

What about albums that have only one or two long tracks? Same music, fewer files, less cost, loophole expolited. Charge per megabyte? Well, not to me, anyway, until the price halves.

Posted by: Rob on April 29, 2003 11:14 AM

It's interesting to see these reactions to the FIRST DAY that the Music Store (tm? I think) was on-line.

Of *course* some of the pricing decisions don't make any sense now. To be brutally honest, nobody really knows what people will be willing to pay for a system like this since there hasn't *been* a system like this. Moreover, I'm pretty sure that the "$.99 per track" price was set uniformly high-ish with the expecation that they could always run (possibly permanent) sales on some artists, songs, or albums.

On the other hand, it's a lot easier to explain and sell "$.99 per track" at an introduction than to spell out the 11 different pricing schemes you might eventually have justification for.

Now, my question about this is how much is Apple getting from the record companies for all of the microdata this effort generates. I'm sure it's worth *something* to find out that nobody listened to more than 14 seconds of an artist they were hoping would take off on her next album...

Posted by: Jonathan King on April 29, 2003 01:29 PM

But speaking of really innovative things, I've always thought the greatest innovations are not those that make the impossible possible, but which make the difficult trivial.

So, for me, the big news yesterday wasn't the on-line music store thing, but the fact that sharing music libraries in iTunes is just sickeningly easy.

In our house, we have 3 machines that hold generally non-overlapping iTunes libraries, since tastes differ and we're just pretty lazy about such things.

It took a total of four mouse clicks (and walking between two computers) to share music over the wireless network in the house, open the library folder, and get "Purple Toupée" through my earphones on the notebook. Geek that I am, I assumed it would choke and die if I went back to the first computer and demanded to hear "Funky Périphérique" shared from the notebook to the desktop at the same time.

OK, stop laughing. It *might* not have worked perfectly the first time, right?

Words fail me here. I think when this sinks in with other people, that Apple could sell a couple million Macs *just* for this one feature alone. Transparent wireless music sharing is just so much more important than most people think. :-)

Meanwhile, I'm sure that something like this will basically work in the near-ish future on every Windows box out there...which is exactly the difference I perceive today between the two platforms.

Posted by: Jonathan King on April 29, 2003 01:43 PM

The greatest thrill of Napster was finding whatever I wanted. Illya Kuriaki and the Valderammas? Natalia Oreiro? Multiple hits. My roommate would find things for which he had spent hours searching through vinyl.

Insofar as it is easier to pay $.99 for a song, this service and the way in which it frees users to do what they want with the songs is brilliant.

I'm noticing that there are certain limitations. Some songs are not available for purchase individually, some albums are not available for purchase while the songs are all $.99.

Here's where I see this going:

As the format is identical, there is perfect price transparency between music. Marketers will very quickly realize what the market is willing to pay and prices will shift accordingly. I believe that the prices will ultimately converge. (Personally I think the prices are very good, but that they will shift with volume.)

In the distant future:

Markets are successful when they provide less services, not more. eBay doesn't sell nor warehouse anything, they fascilitate transactions. The genius of Amazon is that they allow users to file things collectively, give reviews, and that small bookstores and individuals are also able to sell.

What if I were to buy a CD, enjoy it, and then post the music for it on the Internet. The album is already indexed on the Internet, so there is no question as to what I have. I upload songs, and if they are not currently available I get a small credit for having done the work of the Music Industry. The songs are now available for others to purchase for $.99 each, and as the song has already been recognized, those that own the rights to the song will get paid.

Those that own the rights to the song may choose to opt out, in which case the song will be purged from the system. (Though I suspect that this would be foolish.)

Posted by: Saam Barrager on April 29, 2003 02:22 PM

Did ANYONE else use emusic, which did the same thing, a few years ago (1999)? At .99 per song, at similar bitrates, in a platform independent way?

They were bought out by vivendi a while ago, but it was (and is) a great service.

I am not sure about the Mac innovation claim, but this isn't a good example of it at all.

Posted by: Brennan Peterson on April 29, 2003 09:37 PM

Now that I've used the iTunes store, I can say that the big win is for people who aren't interested in buying a whole CD, but is interested in, frex, picking up a song they vaguely recall but which hasn't been on the radio in 10 years. They might pick up other songs off the same CD, but they probably won't.

Being able to buy 1 song of interest, instead of the entire CD, is a big win. (Especially if you're buying something for pure ironic kitsch value - like a song by the Osmonds, or Ann-Margaret, both on Apple's store.)

Also, individual song purchases make better candidates for impulse buys. A person might hesitate before shelling out $10-$15 for a CD, but wouldn't hesitate at buying a $.99 song. AND, I bet that same person could easily wind up buying 15 individual tracks and spending more than the price they balked at before. It's the 'ooh! I love that song!' effect, as opposed to the 'ooh! I love that song, but do I really want to buy a whole $15 CD of the DiVinyls just to get "I Touch My Self"?'

I think the dominant usage mode will be exactly this kind of cherry-picking. If you want the whole CD, there are ways of getting a better price, depending on the CD. Some will turn up in bargain bins in stores. Others, like more esoteric releases, can be had cheap online sometimes via eBay.

This seems to be the model they're working on, anyway, which explains why buying lot of tracks would sometimes cost more than the CD itself.

After all, the natural progression of this would be for artists to release songs, rather than whole CDs full. That's almost becoming a necessity, because keeping a whole CD under wraps is so difficult. It'd be easier to finish one or two songs at a time and release them as soon as possible online.

Incidentally, it wouldn't be very difficult for Apple to repurpose the iTunes software into a music store CD burning kiosk type of thing.

One thing that would be an improvement: if the 30 second samples were of a random 30 seconds of the song, changing each time. Alternatively, they could select 30 seconds that starts with the 'hook' of the song, or the recognizable bit, if any.

Brennan: (eMusic did it first)

emusic did do the .99 thing, but I think the main 'innovation' by Apple is combining that kind of sales model with an application. Browsing, searching, and buying in itunes is, IMHO, a far better experience than downloading via a web page.

Barry: (use the library)

I know about libraries - I just returned a CD today (Aimee Mann, Bachelor #2, excellent, not a bad song on it.) I was surprised to note they now have a copy of Southside by the obscure Scottish band Texas. The library is in Cheshire, CT.

The modern web interface really makes InterLibrary Loan 'work', I think. Before, it was always kind of an abstract idea, something that only bookish inkstained wretches doing research would bother using. Now it's almost like ordering from Amazon, and it's way cool.

Interesting fact: The library in, I think, Greenwich CT has a pretty good selection of the obscure. I think they even had a Mekons CD.

Posted by: Jon h on April 29, 2003 11:01 PM
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