iTunes Staffers Becomes Music's New Gatekeepers

WSJdpatton writes to mention The Wall Street Journal has a look at how Apple is shaking up the world of music retailing. "Apple -- now one of the largest sellers of music in the U.S. -- offers home-page placement in exchange for things such as exclusive access to new songs, special discount pricing or additional material such as interviews with stars. Most other big retailers, digital and physical, also seek exclusive offerings, but Apple is especially aggressive and has outsize clout when it comes to the slightly out-of-mainstream music it often emphasizes."

Comments

The fine line is being danced around

[mcrbids]

In the United States, it's not illegal to be a monopoly. But, once a monopoly, what was once a competitive advantage becomes criminal conduct.

As a business owner, I'll leverage every advantage I can to the detriment of my competitors, including (but not limited to) absorbing the losses in one marketplace in order to ensure the profits in another, and utilizing my commercial strength in an area to negotiate an advantageous relationship with other vendors.

But in the United States, once you've become a "monopoly", many things that were once expected become criminal actions.

Apple can (and should) leverage their dominance in the music distribution scene to their advantage. As a publicly traded company, it's their fiduciary responsibility to make as money as they can figure out how to do. But if the dominance of the Apple juggernaut continues for much longer, they'll be branded a "monopoly", and then things get pretty complicated pretty fast.

No, I don't think they are a monopoly. (I just bought a Creative Zen to replace my dead iPod, and I'm much happier with the result) But their dominance is... dominating.

Apple needs to tread a bit carefully, methinks.

Re:The fine line is being danced around

[troll -1]

In the United States, it's not illegal to be a monopoly. But, once a monopoly, what was once a competitive advantage becomes criminal conduct.

I thought being a monopoly in the US was illegal under the Sherman and Clayton antitrust acts.

Microsoft was found guilty of acting as a monopoly in 2002 after being sued by 20 US State Attorneys General. You might think the punishment didn't go far enough, but that's different from a monopoly not being illegal.

Re:The fine line is being danced around

[bigdavesmith]

While I don't disagree with you, since the example of Microsoft which you cited is obviously the government working against the people, I wouldn't be surprised to see them actually go after a company "which virtually everyone likes", particularly if some of the other companies put more of their money in Washington.

Still, I don't see iTunes being a monopoly, ever. There are simply too many other places to get music. The alternatives might not be as good, but that doesn't make it a monopoly.

Come on now

[EtherAlchemist]

It's not like the majority of music purchases in the US or abroad is happening through iTunes or even users of iTunes. Do the editorial staff have an impact? Yes- within iTunes.

Look, if they had that much "power" over what act becomes the next big thing, they (along with the other music services) would be getting more love from the labels, but that's not the case.

Radio, videos, word of mouth- these are all still more powerful than the iTunes ed staff. I'm sure they'll love the ego boost, though.

Sound quality (IMHO) will keep CDs around

[JohnnyComeLately]

I used to work in a high end audio store back in da day and somewhat had "an ear". After college, I couldn't afford a high end system, but recently I'm starting to have enough cash to drop more $$ on speakers. I distinctly heard on 15 year old speakers just how crappy iTunes music is compared to store bought. Up to that point, I was thinking of ripping the remaining couple hundred CDs (not yet converted) and chucking them....but now I'm reconsidering.

Today, just before leaving work, I got to listen to some new Sunfire speakers (Bob Carver company) that got overnight air'ed for the Electronic Home trade show in Orlando this week... lets just say that even though I'd lost my ear long ago...this reminded me of just how good music could sound.

Anyway, long story longer...I know online is giving stores a run...but I think as long as there's people dropping $10k on speakers (the cost of the system I heard today for JUST speakers...double or triple it to include everything else), I don't think CDs are going anywhere.

I'm probably wrong but that's my opinion.

Here's a list of what I was listening to: Processor
2700 watt Subs (2!!)
2,800 Watt Amp
Speakers (not the same, but similar to these) **DISCLAIMER** The company I work for owns Sunfire...

Re:Sound quality (IMHO) will keep CDs around

[sessamoid]

Anyway, long story longer...I know online is giving stores a run...but I think as long as there's people dropping $10k on speakers (the cost of the system I heard today for JUST speakers...double or triple it to include everything else), I don't think CDs are going anywhere.

Hah! Replace "CDs" with "vinyl", and this is exactly what audiophiles were saying before CDs were around. Here's a hint. Audiophiles have absolutely no effect on what direction the consumer electronics and music industries take.

The proportion of people that can tell 128 kbit AAC from CD audio is pretty small. The subset of those who have the equipment and environment to discern that difference is smaller yet. The subset of those who give enough of a shit to change their buying patterns is really, really miniscule.

Re:Sound quality (IMHO) will keep CDs around

[Serious Callers Only]

I distinctly heard on 15 year old speakers just how crappy iTunes music is compared to store bought. Up to that point, I was thinking of ripping the remaining couple hundred CDs (not yet converted) and chucking them....but now I'm reconsidering.

What does the quality of music on iTMS have to do with ripping your own CDs?

PS There aren't enough people dropping 10k on speakers to stop iTMS selling low-quality music, it's probably 1% of the audiophile market, and 0.0001% of the music-buying market. You seem to equate iTMS with 'online music' here - there are plenty of online stores who offer better quality, some even offer FLAC and let you choose how much you pay. Quality is not really an issue now for most people, and long term it will be a simple matter to increase the quality (iTMS has already done it once for videos), probably to well beyond the quality you get from CDs.

Some day all media will be consumed and sold this way (including TV); let's just hope they drop trying to impose DRM along the way, as that's the only downside to digital distribution of media, and the only reason I don't use the iTMS yet.

Re:Sound quality (IMHO) will keep CDs around

[garcia]

I know that most people don't realize, at this point, that having the physical media is an advantage. Wait till iTunes has been the primary purchasing point for people at around the time when hardware failure starts to take a toll.

When these people lose their entire music collection and have no way to restore it, then we'll see what they think about their past choices.

Re:Sound quality (IMHO) will keep CDs around

[FutureDomain]

Although having the original CDs does have advantages (conversion to other formats without losing a ton of quality, being compatible with older CD players, as evidence to the RIAA lawyers that you legally purchased the music on your computer), hardware failure won't be an issue as long as you back up the tracks and any licenses on a CD, DVD, or portable memory key. And if you don't back up your computer, your music will most likely be the least of your worries. If I was to use similar logic, I wouldn't have computer documents because my hard drive might fail. I don't think people will change their buying habits just because of a possible hardware failure. People either take precautions for hardware failure and back up their data, or they lose it when Windows or Bagle send your computer to the shop.

Apple: a monopoly... doing good?

[the_unknown_soldier]

This article says that apple are the new gatekeepers, but more importantly it says that apple does good things with its powers! Instead of taking cash to promote a CD, they only offer promotion in return for "exclusives" and discounts, therefore improving the end-user experience. What's more important however is that they promote independent artists! From the article:

"Groups like Gnarls Barkley have enjoyed significant boosts from iTunes. Last year, the alternative-soul duo's "Crazy" became the first song to hit No. 1 on the British pop charts based solely on digital sales. When the Shins' third album, "Wincing the Night Away," made its debut in January at No. 2 on the Billboard 200 album-sales chart, nearly 30% of the first-week sales were made online"

Does anyone honestly think that The Shins would be so popular without iTune's help? They are a great (semi) indie band, and iTunes promotes LOTS of indie bands. This is far better than the competition such as wal-mart who will only promote stuff put up by the record companies and paid for.

I was suspicious of this article. Apple's statement on DRM annoyed me to no end. Indie bands often plead with iTunes to remove DRM, and Apple refuses. It stands to reason Apple LOVES DRM, otherwise they would implement an opt-out system for DRM for indie artists. However despite the fact that apple is creating a monopoly in this area, they are actually doing good things with it in promoting indie bands!

Re:monopoly? hmm..

[drix]

For the record iTunes is not the only way to manage music on your iPod. On Windows, I find WinAmp to be a much better choice. The iPod support in the latest version works perfectly, fully supports all of the features like podcasts, smart playlists, etc., and is much faster than iTunes. The iTunes client on Windows is slow, bloated and sucky. (50mb for a browser and mp3 player? C'mon.)