Books written by Ray Sullivan

Sunday, 16 June 2013

iTunes Races Ahead

There's a lot of competition for your music spends these days.  Apple started it with iTunes, but there's plenty of others wanting a slice of the action.  Google are hustling their Google Play, Amazon want to sell us music and Microsoft, through its Xbox Music is making a pitch, though it's far from pitch perfect.  It's a tough market to break into.

For example I've been playing around with Xbox Music for the last month, seeing as it comes pre-loaded on the Microsoft RT as an app.  It seems pretty comprehensive in its range of music, although that is difficult to gauge without being able to compare lists.  You only know what you know, and I've only looked for what I've wanted to find.  I guess evaluating music streaming services puts Donald Rumsfeld's statement 'there are things we know we don't know, and things we don't know that we don't know' into sharp relief, and seems more relevant somehow.

There are gaps, though.  There are some artists I have a lot of material of in my collection, and some of the albums I'd like to see on Xbox music seem to be missing.  But right now I'm having a ball looking up artists and albums from my youth that I've only got on vinyl - as I write this I'm listening to a group called 'The Undisputed Truth' that got hi-jacked by one of the most under-rated talents ever to come out of Motown, Norman Whitfield.  Norman was a writer and producer, who produced some of Motown's most adventurous music, most notably with The Temptations, but it was through groups like the Undisputed Truth that he found he was able to extend his creative talents.  Thanks to Xbox music I'm catching up on their discography.

It's far from perfect, though.  Sometimes it only plays one or two tracks even though I've told it to play the album.  That gets a little frustrating.  In addition there does appear to be track skipping, as if the streamed recording is from a dodgy CD.  Of course, because I'm only using the free version I have to put up with the occasional advert, which is usually ten or so seconds plugging an obscure new artist.  Additionally they stop streaming every so often, just to remind me that there is a paid service I could use. I have to accept, grudgingly, that is the price cheapskates like myself have to consider sometimes.

But the leader of the streaming pack has to be iTunes.  They've just announced that they are currently adding about half a million new iTunes accounts a day and that they are on track to have added over 100 million new accounts this year by year end.  It's the volume of accounts that give Apple the revenue they seem to love.  It seems that each iTunes account, and there are over 500 million of them now, generate about $3.20 a month for each account, on average.  Clearly some households buy more music than mine does.  It's probably Bruce Willis skewing the figures.  It seems that he's not suing Apple, by the way.  It's not in dispute that he's unhappy that his extensive iTunes collection reverts to Apple when he dies, but he's not taking the legal route to sort it out with them.  Having seen how he sorts out organisations that piss him off in the Die Hard series I'm really keen to see the next step in this long running dispute.

Anyway, some analysts think the revenue per account is cause for concern because it's about half the revenue each account generated back in 2009.  Back then there was a paltry 100 million accounts - hell, I wouldn't get out of bed for numbers like that, let alone write a daily blog.  Get your counting fingers out and you'll soon realise that 500 million times $3.20 is a not unreasonable $1,600,000,000 a month, whereas $6.40 times 100 million is about 2.5 times less.  I had to double check the numbers because it seems a mind boggling amount even for Apple, but of course they only skim a profit off that and pay the owners of the music the bulk. However if those numbers do represent the state of the download music industry then it's clearly healthier than it cracks on to be.

It's difficult to imagine Google, Amazon or Microsoft, and all three are major players in the industry, making any serious inroads into iTunes anytime soon.  None of those have built up an infrastructure that challenges iTunes' ecosystem.  Microsoft might be on the right track - giving the music away initially to rope you in.  Their paid for service, at less than £90 a year which seems to allow you to download albums to listen to off-line too, isn't too expensive either.  As long as they can stop the tracks skipping and improve the range of albums available, then I might consider paying for a subscription.

In the meantime, I think Apple can breathe easy.


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