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MP3 Market Approaching Critical Mass
An anonymous reader writes "Led by the Apple iPod, Jupiter Research says that sales of DAPs are reaching a point where it will ignite an industry of support products and services. According to Jupiter analyst David Card
'Historically, any new device or medium that reaches a U.S. household penetration of 15 percent to 20 percent creates a critical mass of customers for other products and services.' The iPod already has a slew of peripherals out there and this is particularly good news for the paid download services like iTunes, especially with Apple announcing Wednesday they sold another 5.3 million iPods last quarter."
Trust me, people buy them. If they just spent $400 on an iPod they're going to want to protect it, sell them a case. They want to listen to their iPod in their CD players at home/in the car, sell them a transmitter. It's an expensive toy, so $50 more to make it work better and stay in better shape is not much...
Now, nearly two years after Apple's iTunes launch, record executives have become worried that they have inadvertently ceded too much power over their industry to this charismatic computer executive.
Frustrated at what they see as Jobs' intransigence on song pricing and other issues, some record executives are now turning their hopes toward other partners...
Cripes, this is so damn typical of the entertainment industry. They're so interested in screwing everyone they can for a buck that the minute someone is successful using their property, they feel they need to bite back. It's rather like watching a bunch of cavemen around the first fire. One gets burned so they all put the fire out with their clubs, then thump their chests and hoot in victory before sitting around in the dark and cold again.
I think RIAA deserves the Duh! Prize (if there was one.) Next year or so it'll be the MPAA doing the same thing.
A feeling of having made the same mistake before: Deja Foobar
Is anyone else suddenly feeling the overwhelming urge to chamber a round into their shotgun? Is this the same Jupiter that is hell-bent on screwing over the internet with spyware and adware? If so, how on god's green earth is it that we're taking their "research" seriously?
"So you're paying $30 for that non-Apple add-on. Why isn't Apple making these things?"
Because they've probably determined that it's not their core competency, and is in fact an example of di-worse-ification.
Chuck
The one benefit with radio: You have a much better chance hearing a song you've never heard before.
Where do live that you have this bizarro-radio?
I'll turn into a supernova and burn up everything. Well I'll turn into a black little hole and you'll turn into string.
And while it will be tough to find new people to sell to, that's not the only factor. Everybody also has a car. And yet, man, look at all the cars that get bought every single day. Everybody also has a computer, and a TV. So how the hell are those computer and TV makers staying in business? It's not a problem. It's a fact of the market. There may be less growth in iPods in years to come, but Apple will still sell plenty.
Do not touch -Willie
Yep, these are the guys who proclaimed that "home taping is killing music" back in the 1980, and killed off DAT in the 1990s. The MPAA cried bloody murder when VHS hit the market, but amazingly the global film industry is still quite robust.
What really cracks me up is that the RIAA had their heads so far up their asses that they had *no strategy* whatsoever for online music sales until Jobs came along and offered them a way out. Now that they have a path away from stupidity, they're trying to jack prices up again, the same way they did with CDs.
It's like they're fundamentally unprepared to realize that the landscape is changing and that they can't make the same margins they used to make per song. They have to shift their entire way of doing business, but they're so fat and happy that it's like Jabba the Hut doing the long jump.
Read the EFF's Fair Use FAQ
Problem for apple is that everyone already has an ipod and it will be tough to find new people to sell to.
Not when you sell a product that expires. Non replaceable batteries that expire every 18-36 months means people have to buy new ones. Also, there are constant feature upgrades -- even if they are only stylistic. I have an older iPod, and I can't wait for the battery to die so I can justify getting a new one with that awesome jog wheel... [drool]
Similarly, the auto industry seems to be doing just fine.
I agree with the grandparent post. "RIAA" is not a valid shorthand for "The Record Companies."
First of all, the RIAA is an organization which includes labels, artists, engineers, and many others who are connected in one way or another to the recording industry. That little set of preamp-adjusted ports in your dad's stereo that he plugs his turntable into? That is an example of an RIAA standard.
Secondly, the labels have been using "RIAA" as the plaintiff in several unpopular lawsuits for the specific purpose of getting people like you to think "damn RIAA" instead of "damn Sony, RCA, Virgin" when you get upset about your rights being trampled on. That way, folks keep buying their products like good little sheep without realizing who they should really be upset with. When you use "RIAA" as a "shorthand" for the real bad guys, you are helping their cause.
Information wants to be anthropomorphized.
Great. Now how do I skip to track 5? Oops.
---- Den ene knappen er powerknapp, den andre er Bender voice knapp "Bite My Shiny Metal Ass"
Errr.... no. In many industries, having a range of prices, especially that vary with time, allows not only for greater profits, but for larger numbers of satisfied customers. The math is a bit more involuted than a simple supply/demand scissors curve, because you also have to factor in substitutibility, price elasticity, and information costs, and time value of money, but in many situations this allows for a good thing all around.
This is one reason why grocery stores have sales; people who would not ordinarily buy a product at price X will consider buying it at price 0.9X. Furthermore, it's one reason why grocery stores accept manufacturers coupons; the customer gets a lower price, the grocery store gets slightly more money (for slightly more hassle), and the increased sales (and potentially increased regular customers) result in net higher profits for the manufacturer.
In this case, the RIAA is wishing that they could run the backcatalog at a discount, while charging a premium for newest releases. And if they were willing to, say, knock $0.24 off their current $0.65 share of the price for releases over 10 years old, while adding $0.01 to the recent releases and $0.25 to items released within the last year, I'd consider it likely to be a net benefit for consumers overall.
Someone with more background in economics and without a head cold might explain it better, but it comes down to: the ability for suppliers to have prices that vary is a good thing for the consumer. Unnaturally fixed prices (such as, say, when fixed by a cartel) are bad.
//Information does not want to be free; it wants to breed.
It's a kind of balance.
Support costs for accessories can be substantial, and a consistent level of quality in product and customer service are key to the Apple brand. Extending the business is inevitable, but must be made in step with the brand's "promise."
Also, a strong third-party market only helps Apple (lots of choice, innovation, good pricing, etc.). Why enter and compete in a market when the existing competition is helping you? Any effective step by Apple into the accessory market would either cause furious competition (cutting into the profitability) or discourage new competitors (level it out).
As of now, Apple is getting the best of both worlds - iPod accesories make the iPod more attractive, "cool", and reinforce the brand. Meanwhile Apple can operate independent of this market. The company is reaping the market rewards from a successful product. Soon, however, the brand will mature and there will need to be an injection of marketing, innovation, and features. The third-party market will only accelerate the effectiveness of Apple's brand.