iTMS Threat O' The Week (8/24/04)
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Sure, the iTunes Music Store may be on top now, but if you're a longtime Apple fan, the idea of the company holding the highest market share in any product or service category seems, well, completely and utterly unnatural to you. As such, you constantly suspect that the party can't last forever and that at any moment a competitor will emerge that, better or not, will stomp all over the iTMS and relegate it to the 5%-or-less market share which you suspect is actually coded right into Apple's DNA. We're used to being the underdogs, so we fretted over the advent of BuyMusic.com (as silly as that was), we got a funny tummy over the Napster launch (which has yet to made a dent), and every time another download service shows up with some new gimmick, no matter how many times we've seen the iTMS brush off the "threats" like no more than lint on the Great Sportcoat of Life, we can't help wondering if this will be the one that ends the dream.

The thing is, though, the iTMS's hot streak has lasted through everything the other services have thrown at it thus far, and if you've been nursing a bleeding ulcer and pulling your hair out in fistfuls fretting over RealNetworks's current double-whammy of Harmony and temporary 49-cent downloads, it's probably safe to unclench a little bit. Faithful viewer Fabian tipped us off to a CNET article which reports that, by Real's own admission, while its download business has jumped "severalfold," the company has only sold about a million songs in the first week of its price-slashing madness. The word "million" always sounds like a lot when you hear it, but it's worth keeping in mind that the iTMS also sold a million songs in a week-- its first week. And that was with non-money-losing 99-cent downloads and a much smaller market, since only Mac users could participate at the time. So it sounds to us like for all of Real's headline-grabbing hoopla over "freedom of music choice" and its willingness to temporarily cut prices to what is obviously a loss-leading level, the company is still way behind the curve.

What is it with these services and their willingness to burn through huge gobs of cash for a shot at the crown, anyway? In addition to this goofy 49-cent thing (which will be costing the company money on every song purchase through Labor Day), faithful viewer Panchomill alerts us that Real has also jumped on the "let's sign up colleges and universities at ridiculously low prices" bandwagon popularized by Napster in recent months. According to the Associated Press, the company "will begin offering some university students its digital music subscription service at a steep discount in an effort to stem illegal downloads and attract long-term customers." So students (non-Mac-using ones, anyway) at UC Berkeley and the University of Minnesota get to rent their music for "between $2 and $3 a month," versus the $9.95 Real usually charges. (Okay, technically Real claims it'll still make a profit at that price, but it can't be making much-- certainly not enough to cover what it's losing on its 49-cent songs.) If renting music to college students at severely reduced prices is the best the rest of the industry can come up with as a challenge to iTMS dominance, maybe we shouldn't be worrying after all.

Oh, wait-- scratch that. The Mercury News is reporting that "Microsoft plans to quietly launch the MSN online music store with the new version of its Windows Media 10 player" sometime this week. Why "quietly," you ask? Because while upstarts like Real and BuyMusic need to grab as much attention as possible with fake consumer advocacy campaigns, wildly low prices, and billboards of a giant naked Tommy Lee, Microsoft has a monopoly to fall back on; the company "expects to introduce as many as 130 million people to its music download store as computer users are prompted to update their media player software." Must be nice to have a captive audience, hmmmm?

So the one thing you don't need to worry about is not having anything to worry about. True, the iTMS is available for Windows and almost certainly provides a nicer customer experience than whatever Microsoft has slapped together; truer still, Microsoft's service isn't compatible with the iPod, which is probably a serious disadvantage. But between the 130 million Windows users who'll automatically be directed to Microsoft's download store and the "300 million people who drop by the MSN site," Microsoft has the numbers it needs to get away with mediocrity just like it has a thousand times in the past. So keep them stomachs a-churnin'!

 
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The above scene was taken from the 8/24/04 episode:

August 24, 2004: Apple customers are the most satisfied ones in the industry-- this year, at least. Meanwhile, RealNetworks keeps flailing away while Microsoft prepares its own music download store for launch later this week, and a mention of several wireless technologies in a couple of job listings fuels rampant speculation about future iPod capabilities...

Other scenes from that episode:

  • 4877: Satisfaction Guaranteed (8/24/04)   Hey, are you satisfied? Because apparently the odds are pretty good that you are. See, you're tuned into an Apple-flavored online soap opera right now, and unless you're here because you're looking for good prices on "applet urns" (our condolences on the passing and subsequent cremation of your favorite Java applet if you are), that strongly implies that you're a user of Apple's products and/or services...

  • 4879: "50 CCs Of Credulity, STAT!" (8/24/04)   Red alert, people, we've got an emergency here! We never thought it would happen to us, but somehow it seems that both our Skepticism Index and our Common Sense Quotient have risen to dangerously high levels-- levels so high that they endanger our very ability to speculate wildly about upcoming products based on the flimsiest of evidence...

Or view the entire episode as originally broadcast...

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