Media Wonk

Link This | Email this | Comments (0)

Will Amazon core Apple? - September 26, 2007

Most reports of the beta launch of Amazon's new DRM-free music store have focused on its purported challenge to the supremacy of Apple's iTunes Music Store. But if I'm Apple, I'm actually not all that worried. I might even be glad for the company.

Why? Because iTunes is not a core business for Apple. Apple's core business is selling iPods. Its purpose in creating iTunes was to make sure consumers had a good initial experience buying legal downloads for their new iPods, and to make sure iPod owners would have a steady supply of legal tracks at a low price set by Apple.

Mission accomplished.

At this point, Apple doesn't really need to rule the online music roost. Its main concern is to keep a lid on download prices so they don't become an impediment to iPod sales. And on that score, Amazon is actually doing it a favor.

Amazon is pricing most of its tracks at 89 cents each, hoping that the combination of low prices and the absence of DRM will lure online music buyers away from iTunes. But Apple is probably happy to give up some market share if it means lowering the pressure from the record companies to raise prices on iTunes.

If the labels are willing to let Amazon sell unrestricted music for less than Apple sells tethered tracks, they don't really have grounds for demanding that Apple raise its prices.

With the iPod safely atop the player heap, the more low-priced tracks available to play on them, the better it is for Apple.


[Platforms & Formats]  [Streams & Downloads]   LEAVE A COMMENT