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Table of Contents
Introduction A Crossroads in the History of the Recording Industry
All Resources The Apple Revolution The most prominent enterprise to come to the fore in recent years is undoubtedly Apple Inc., which has positioned itself as a dominant player garnering some 75% of the US digital marketplace. Apple’s success was built by combining the popularity of its portable iPod digital music player with its iTunes online music store in a combined hardware-software strategy that in the past has been the hallmark of the music industry. Apple claims to have sold over one billion songs through iTunes in 2006 alone (double its sales from the previous year and almost double the number of downloads reported by Soundscan for all other North American music services combined during the same period). Apple's dominance has given it an enormous influence in shaping the emerging digital music market: the market is now defined as essentially a portable market, with the MP3 and Apple's own proprietary digital file formats taking precedence over uncompressed CD audio. Digital album sales are slowly on the increase, but it is the single song that has become the primary focus of the digital marketplace replacing full-length CDs. Apple has successfully defended its uniform 99-cents-per-song, “pay-per-download” pricing policy against industry protest and competing music service business models that operate on a subscription basis. The shift to the single song as a market focus is itself a potentially significant marker of change in the future organization of the music industry. The cycles of record industry production have been focused around the release of full-length LPs and CDs for the past forty years, resulting in delays of one to two years between major releases for most artists, large investments in production and promotion, and high retail prices. Online music distribution removes many of the manufacturing and shipping costs associated with physical record production, thus making the single a viable economic entity, especially for independent producers, much as it had been for decades prior to the late 1960s. An industry organized around single songs allows for more frequent releases and smaller individual investments (and profits). Many consumers have welcomed the single format, having long felt that the quality of songs available on CDs was uneven. Musical Cyber-Commerce All Resources |
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