iTunes: Annihilates the Music Industry

Posted: October 2, 2011 by karjadi15 in 2011, general, interaction, sound, Uncategorized

 

Introduction

In the post Napster music world, P2P sharing systems have made themselves into nearly every household in the world. Millions of people were exchanging and sharing files on the Internet like it was a way of life. The explosion of the Napster case in 1999 made it clear to the people, these types of systems are damaging the recording industry.[3] It was the Industry against Napster, and then it was the Industry against the users who share, who were the customers of the Industry itself. The excitement about P2P systems comes about the concept invention of easy and efficient file sharing.[1] A brilliant and harmless concept that allowed people to share files and photos over the net with high speeds and no limits became an engine system to steal creative work. From personal files turned to sharing copyrighted music and videos.  A million users could have a whole playlist of songs for free from only one single user that purchased the songs and shared them.  This report looks at how Steve Jobs and Apple saw the P2P phenomena as an opportunity to create what we now know as iTunes.

History of iTunes

Recognising this problem in the music industry that the P2P networks have created, Steve Jobs, CEO of Apple, saw an opportunity to change the digital landscape. The peer-to-peer network invention was not seen as an illegal nuisance through Apple’s eyes, rather it was a way to manifest the same concept and market it as a new invention. Doing what Apple does best, grabbing a past technology or a negative invention and turning it into a device that changes how we think about technology. Let’s face it, Apple have not exactly invented anything radically new since their release of the original Macintosh, with the exception of the recent phenomena the iPad. The iPod was created and released at a time where MP3 players were not excitingly new. The iPhone was not a device that introduced a new technology to the world. O2 or what we know as Blackberry nowadays has already been designing and creating touch screen phones with apps for quite some time.

Apple is famous for being able to turn current technology or older technology into something bigger, into something seemingly new. Through their ingenious marketing and design team, an already released technology can seem like a device out of this world. What makes all of Apple’s technologies so appealing may be the fact that all of them can be connected with a single app, the iTunes. Steve Jobs, recognizing the success of file sharing on the Internet, went to Robin Casady and Michael Greene to discuss the idea of using their SoundJam MP as the base program for the iTunes. SoundJam MP was a popular and powerful digital encoding program that already looked like Apple’s own Quicktime Player.[2] This was around the year of 2000.

About 10 months later, Apple decided to release the first ever version of the iTunes. With the decision to make it free software for all Mac users and also PC users, iTunes generally became the world’s best and easiest media player to use.[2]  For many people, iTunes was the introduction to digital music as it was efficient and simple, with the launch of the program as soon as a CD is inserted into a computer, which then loaded the disc and straight away receives track data from Gracenote to your library.[2]

iTunes was founded based on the idea of network sharing, the sharing of media on the internet, not for illegal purposes but for good. iTunes enabled the option to share media within the user’s home network. Then there was the release of the iPod and iTunes compatibility to the iPod. It was then clear that Apple was trying to build technologies around the iTunes, being able to connect all the devices together through one central app.

The Music World

The recording industry is only one section of consumer goods in the world. The revenue out of the Industry is not a big contribution towards the GDP as a whole. But as consumers, music is all around us, we listen to music to and from work, while exercising, as a leisure activity and we also tend to choose radios with higher music rotation.[3] So as we can see, the revenues might not be a significant amount but its share of the collective conscience is massive. “The stakes in the battle over the music business are small enough to get lost in the rounding error for world GDP…” but its significance and importance within its consumer is much larger than values shown in numbers.[4]

The basic function of the music industry is to create this connection between the artist and the consumer while compensating the stakeholders that contributed in the process. But when we think about it, the amount of marketing that the Industry does is only at a large amount to the big and famous artists while the bulk of artists only enjoy a minimal promotion. Therefore, we have come to a time where the recording companies have outlived their somewhat importance to the connection between consumers and musicians.[5] The Industry is now changed. This is why iTunes have succeeded, using the P2P sharing concept, Apple found a way to connect consumers and musicians directly with no middleman.

Album v Singles Sales

The Music Store

Obviously, the key feature of the iTunes has got to be the Music Store that is available online.  It was released with the update of the iTunes 4 in 2003 [2] and it was a big success with the store having 200,000 songs on the first day of release.  The most fascinating aspect about this feature of the iTunes is that it completely changed the face and mentality of the Music Industry as a whole. Going all out with the same idea that Napster and all P2P system had, Apple changed the way people think towards music. The Music Industry, as we see from above, has always been the connector from musician to listeners and they have always believed in the sales of a tangible object that plays the music itself. What Apple did with iTunes shifted this mentality, suddenly it made us realize that music is not about the CD or the Vinyl, it was about the actual music. It gave the listeners freedom to purchase songs not physical objects that contains songs; it also allowed us to purchase these songs off the net with a very low price and very conveniently. Apple recognized the current generation of ‘I want it now’, the generation of bloggers. So because the Music Industry then is based largely on its consumer not its revenue, it was genius for iTunes to focus the music towards them not towards promoting the recording companies. “Simply put, as long as consumers are asked to buy bundled songs  [called CDs] at about US$16…yet can access the same content for free…” the existence of physical album will be at stake.[5]

In a way we can see that iTunes regulated the problem of music piracy within P2P systems back then because what Apple did was to give consumers an efficient legal alternative to downloading music. But, in turn, the Music Industry starts to blame iTunes for killing their business. A chart is shown below that displays the decrease of album sales due to iTunes existence. The Music Industry was also said to be dying because of Apple’s DRM (Digital Rights Management) laws on their music. “No one but Apple is allowed to make players for iTunes Music Store songs, and no one but Apple can sell you proprietary file-format music that will play on the iPod.”[6] But I think we need to think of it in a different perspective, as I have mentioned before, the Music Companies are no longer needed to connect the musicians to the listeners in the generation. There is this desire to go straight to the source in this Internet age, it also allows consumers to sample music and then purchase the album if they enjoyed the first song. iTunes is clearly for the consumers and the musicians, it was made for us, it cuts out the middleman and more money goes to the musician. The Industry might get less revenue but the musicians are benefitting from this. It also allows independent artists to get exposure without big companies’ marketing. So what the app is doing is that it promotes more of the artist and gives back more towards the artist. As for the DRM, isn’t it regulating the original problem of piracy? It restricts users to make a certain amount of copies or being played on a certain amount of computers.

In conclusion, I found iTunes to be a very interesting media in this generation. It’s seen as the Industry killing machine and makes Apple look more of a bully than they already are. But I see it as one of the best or if not the only invention that Apple has come to. It seems to be able to regulate the piracy problem quite well and it’s a program that allows a legal alternative to music sampling in this P2P world of ours.

REFERENCES

1.  Good, N & Krekelberg, A 2002, Usability and privacy: a study of kazaa P2P file-sharing, HP Laboratories Palo Alto

2.  Simon, M 2009 The Complete iTunes History – SoundJam MP to iTunes 9, 9 November, viewed 30th November 2011, <http://www.maclife.com/article/feature/complete_itunes_history_soundjam_mp_itunes_9>

3. Liebowitz, S 2004, Will MP3 Downloads Annihilate the Record Industry? The Evidence So Far, in Gary D. Libecap (ed.) Intellectual Property and Entrepreneurship (Advances in the Study of Entrepreneurship, Innovation & Economic Growth, Volume (15), Emerald Group Publishing Limited, pp.229-260

4. Romer, P 2002, When Should We Use Intellectual Property Rights?, in The American Economic Review, Vol.92, No.2, Papers and Proceedings of the One Hundred Fourteenth Annual Meeting of the American Economic Association, pp. 213-216

5.  Frost, R 2007, Rearchitecting the music business: Mitigating music piracy by cutting out the record companies, viewed 30th November 2011, <www.firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/1975/1850>

6. Doctorow, C How iTunes is bad for the music industry and the public, Viewed 30th November 2011, <http://boingboing.net/2006/07/26/how-itunes-is-bad-fo.html>

7.  LICASdigital, 2009, iTunes History, Viewed 30th November 2011 <http://www.youtube.com/watch?v=Iv5pAGb4qtI&feature=related>

8. mediastudiesaelzer, 2011, History of iTunes, #uhsmediastudies, Viewed 30th November 2011 <http://www.youtube.com/watch?v=MC2V7ziaock&feature=related>

9. Captivate08, 2011, iTunes killing the music industry, Viewed 30th November 2011 <http://www.youtube.com/watch?v=_SB6YXZye_8>

10. Brownlee, J 2010, Music Industry CEO Asks If iTunes Killed The Album, Viewed 30th November 2011 <http://www.cultofmac.com/51899/music-industry-ceo-asks-if-itunes-killed-the-album/>

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Comments
  1. R.I.P. Mr Jobs…that clever man. However, what is Apple going to do now, with his absence…

  2. amynasha says:

    Love and hate… we don’t have jobs anyway. The report might be a good way in memory of him. But I still doubt that whether the musians benefit most from the change or not.

  3. Isabel says:

    I think it’s great that the profit goes directly to the artists than the producers, they deserve it anyway, especially indie artists. I read an article before saying how Steve Jobs was able to convince the people from the music industry about the idea of iTunes, and they agreed that it is quite profitable too. It’s just weird now that, it seems Steve Jobs was able to outsmart them. But hey, I can’t deny that he knows what he’s doing.

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