Digital Sales and The Indie Music Industry.
Digital sales of music for Apple, as I have written in my blog Apple and The Indie Music Industry, were tied to another extremely profitable and widely successful product in their MP3 player, the iPod (and subsequently the iPhone) which became the most vital reason behind its success. iTunes store made it easy for consumers of all ages and levels of tech-comfort to use Apple’s experience, making it a user-friendly and consistently dependable product. Along with that, convenient interface and engineering quality of the iPod brought Apple an almost unheard of profit margin, as iPods were sold at a much higher cost than its competitors.
Apple was perfectly placed to foster the entrance of evolution for the indie music industry with its integrated and easy-to-use interface across Mac computers, iPods and iPhones and digital music. In my previous blogs I have been discussing the evolution of the indie music industry after the advent of internet. With all its success, the scenario of evolving indie music industry was ideal for Apple as a company. The consumers could purchase music more conveniently at lower prices, so it was good for the consumers as well, however, it appeared that the record labels were likely not entirely pleased with the agreement. iTunes and Jobs were constantly being pressurised by them to charge more for the music of popular artists by the use of differential pricing. Jobs, however, managed to resist this change for several years and major labels had to comply because by now, Apple’s popularity had made it too valuable a partner to abandon.
When CD sales continued their steep decline, as published in March 2009 article from Daily Finance, Apple was compelled to introduce a three-tiered pricing model. According to the model, iTunes started charging $1.29 for more popular songs. In doing so, iTunes was able to leave behind the digital rights management standard it first adopted in response to consumer preference and competing services without these restrictions, as documented by the New York Times in 2009. Today, in less than a decade, the iTunes music store has grown to an unimaginable size. It sold its 10 billionth song, establishing it at the top position among music retailers worldwide, as announced by Apple in 2010.
In a confirmatory study, market research done by the NDP Group and published by CE Pro, an online consumer electronics publication, in 2012, Apple was found to own a whopping 64% market share for digital purchases of music, and 29% of market share for music retailers as a whole. Noting this success of Apple, other established companies – Google, Amazon etc. also decided to explore the digital music market. Other smaller companies followed suit and tried to create a viable business model around digital music, some were also successful in sustaining and even growing.
As discussed in my blog Effect of Piracy on The Indie Music Industry, in the early 2000s, programmes like Gnutella that were more advanced form of P2P file sharing, directly connecting computers and actually created a dispersed network which consequently removed the need for a centralized directory; unlike Napster that hosted file names on its own server. However, in 2003, RIAA again filed a suit, this time against individuals who had used Kazaa, the P2P program, to share large number of files illegally. While the system was difficult was difficult to fully shut down due to its diluted nature, the record companies (again) managed to win large settlements from these cases.
Some websites like Beatport, started in Denver in 2004, have found success in digital music, following in the footprints of Apple, but offering niche based songs that may not be found on iTunes, catering specifically to the emerging genre of electronic dance music. In my next blog I am going to discuss the effect of Apple and iTunes on the indie music industry, record labels and other digital services. Please share your experiences in the comments section and I will add them to my future blogs.
If you need help in creating and maintaining a website, HyperEffects can help you connect with your target audience efficiently. HyperEffects is one stop for your website, marketing and cyber development requirements. It helps you to create a website to display your talent or sell your indie music or indie art.
