Apple’s impact on Digital Music Distribution
This article discusses how Apple’s iTunes has revolutionized the digital music distribution landscape. With a share somewhere between 70 to 80 percent of the digital market, Apple is clearly an important player in music sales at the cost of the music industry, record labels, and even retail outlets. An interesting point was made regarding the pricing structure Apple pushed upon the music industry that I hadn’t thought of. Retailers typically sell CDs at different prices depending on their release date and popularity among other factors. Apple, however, set the standard price of $.99 per song with DRM and $1.29 without DRM for any artist, reducing the record industry’s ability to not only control the prices of their products but also to force consumers to purchase a whole album. Interestingly, prices for albums are still varied across the iTunes catalog, but the threat of being able to purchase a single song probably affects and even reduces the price record companies can charge for a CD. Others believe it may actually impact and possibly improve the quality of the albums artists release because they now have an added incentive to make sure every song is not just filler.
Additionally, the decline of the industry may not be completely tied to piracy or to a lack of innovation by the music industry, but also to this new model of purchasing music. The article discusses how the music industry has morphed into an era of the “singles” artist. What this essentially means is that people are no longer willing to purchase a whole album for just a couple songs like they did in the 90s at the height of the music industry’s revenues and record-breaking CD sales.
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