Filed under: Analysis / Opinion, iTS, iTunes, Apple
iTunes, number 2 with a bullet
I have an iPod, an iPhone, an Apple TV, and I manage all my music with iTunes as I am sure many, many other people out there do as well. Why do I mention this? Because some of my purchases (and yours too) contributed to making the iTunes Store the second largest music retailer in the US (according to NPD data) in 2007. That's right, iTunes is second only to Wal-Mart in sales of music (though the iTunes Store does lack those greeters that make shopping at Wal-Mart so pleasant).
Let's take a moment to reflect on this. Less than 10 years ago the idea that the second largest retailer of music wouldn't have a single brick and mortar store would seem ridiculous. Today, it is a reality and digital distribution can only get bigger. We're living in the future, I tells ya.
Apple also mentions that people downloaded over 20 million tracks on Christmas day alone. iTunes does face some tough competition (I'm a big fan of Amazon MP3), but the ease of use and integration with the iPod/iPhone really makes the iTunes Store a force to be reckoned with.
Thanks, zx.
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Reader Comments (Page 1 of 1)
ron said 11:39AM on 2-26-2008
and the stock keeps going down...it's so wrong!
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Jorg said 12:17PM on 2-26-2008
The stock keeps going down because Apple has become niche player with expensive (overpriced) hardware again. I would like to see more Mac mini updates or another headless Mac. That and a sub-$1000 notebook. OS X only gets you so far before price becomes a factor in the broad market. You can get a heck of a nice Dell for hundreds less than the MacBook which is Apple's number one selling computer.
Tony said 1:49PM on 2-26-2008
"The stock keeps going down because Apple has become niche player with expensive (overpriced) hardware again. I would like to see more Mac mini updates or another headless Mac. That and a sub-$1000 notebook. OS X only gets you so far before price becomes a factor in the broad market. You can get a heck of a nice Dell for hundreds less than the MacBook which is Apple's number one selling computer."
Your "perception" and reality do not match. Apple has significantly increased Mac sales every single year since the release of OS X. They are selling more computers, by a wide margin, than ever before. Their market share is increasing and profits are rising when the majority of other players in the space are declining. You clearly don't understand Apple's business model, and probably never will. Apple has no interest whatsoever in becoming a Dell or HP. They have no interest whatsoever in competing in the commodity market.
David said 11:38AM on 2-26-2008
I agree. It would be foolish to not recognize competitors like Amazon mp3, but the reason why iTunes is so successful is because of it's seamless integration with everything Apple. Just click Buy Song and it starts downloading right into the Purchased playlist in iTunes. It's the integration that makes it that much better above the rest (among other reasons of course).
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matthew said 11:50AM on 2-26-2008
"among other reasons of course"
There are other reasons, but you nailed it initially: simplicity has pushed iTunes' popularity forward, and, IMO, this is only the beginning. Movie rentals will explode, and will contribute heavily to iTunes' success in 2008.
David said 11:56AM on 2-26-2008
Matt, that's a good way to put it. Simplicity. That's definitely what it is. And I agree with you, movie rentals will really help Apple, especially if they continue this trend of offering the pick-of-the-week for $0.99. That should get the ball rolling. It also makes the Apple TV a better device, giving consumers a better reason to buy one.
Josh said 1:17PM on 2-26-2008
Simplicity? Ha! I'm still waiting for an iTunes Lite so I can just listen to music, internet radio and add songs to my iPod without the extra bloat and "buy this at the iTunes store" nagging. A music player does not need to take up almost 100 megs of RAM to run. I think iTunes peaked at about version 4.
Kev Orng said 2:49PM on 2-26-2008
@josh
Can't help you with the app size, but have you looked in iTunes preferences? You can make that extra stuff go away under the "general" tab. Dig in a bit further and you can disable all kinds of stuff.
Though I really recommend you keep "party shuffle", I love it for normal listening, because I can get a random mix but I can see what's coming up in the shuffle queue. Which is a very good thing when I'm at work. Some of those random 'funny' songs or "WTF is that" moments that I may or may not have downloaded over the years have a way of disappearing into the pile and reappearing in a random mix just as the boss walks into my office.
mark said 11:52AM on 2-26-2008
What I want to know is how far behind is Apple from being #1? Good luck finding anything on NPD's site.
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Chris G. said 12:00PM on 2-26-2008
I am getting very impatient with iTunes Plus. Where are all of the labels that Amazon's MP3 Store has?
Amazon is getting more and more of my business now. Practically nothing I want is available DRM free on iTunes.
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Chris said 12:18PM on 2-26-2008
Dude, blame the big music labels. The guy from Universal has publicly stated is disdain for Apple. He doesn't want them to be the big kid on the block because Steve doesn't kowtow to the music labels. His nose is free and clear of brown debris.
The said they want Amazon MP3 to take market share away from Apple so they've licensed Amazon to sell MP3s with no DRM. The same tracks that are on iTunes all wrapped up in DRM. They want you to make the choice to buy the non-DRM MP3 and take market share away from Apple.
And it works for me. I try and find the track as an iTunes Plus song first, then I go to AmazonMP3 and look for the track. If neither service has the track then I find it the old fashioned way. I will never buy a DRM'd track again even though I know that hurts Apple.
Tony Ward said 12:24PM on 2-26-2008
Yeah, Wal-Mart has the greeters, but whatever pleasant-ness they might impart is quickly neutralized by the guaranteed presence of moms screaming obscenities and wantonly abusing their kids in Aisle 2. Give me iTunes any day.
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Jason said 12:28PM on 2-26-2008
I bought $80 worth of music on Sunday at Amazon's MP3 store. I spent $20 at the iTunes store, only because I couldn't get the band I wanted (The Bamboos) on Amazon.
I will continue to buy from Amazon as it's cheaper, and the quality is better than 128K AAC, and of course, no DRM. So I can play my files elsewhere, like through Traktor DJ Studio when I play a set with my laptop. I want to be able to use my music wherever I want, and not always on Apple's (or the labels') terms.
Yes I do like and own some iTunes Plus stuff, but I'd prefer MP3 all around. I know a lot of other people who feel that way too.
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Blaktornado said 12:28PM on 2-26-2008
Labels will be reluctant about Amazon MP3 due to the lack of DRM.
Heck, even if the labels aren't then indie musicians will be.
I used tunecore to put my album on iTunes and until I realized Amazon MP3 was DRM free, I was going to submit to them too... but then I didn't. Piracy will be the end of music, sadly, and if the world goes DRM free then music (and more) will die.
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Sam Katz said 8:49PM on 2-26-2008
I find this very sad.. and not true. Johnathan Coulten has made a name and profits for himself completely drm-free, and actually creative commons licensed.
--Sam
Eric said 2:23PM on 2-26-2008
It's only #2 if you ignore the 800 lb gorilla in the room, that being bittorrent and other methods of file sharing. If you consider piracy as a distribution channel, then Apple finds itself as a very distant #3.
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Patrixck said 2:59AM on 2-27-2008
well...they *do* have brick and mortar stores....which do help to boost their online sales by selling more ipods.
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valthewu said 3:02AM on 2-27-2008
one can only hope that apples webobjects-servers aren't treated as badly as wal-marts employees. and 70% of the music isn't produced in china.
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Galley said 9:00AM on 2-27-2008
If I have to choose between MP3 and AAC at the same bitrate, I'll choose AAC every time. I'm holding out for the rest of the major labels to go DRM-free in the iTunes Store.
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