Half Empty, Half Full?: iTunes Music Store vs. Vinyl vs. Windows

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Date: Thursday, May 22nd, 2003, 08:09
Category: iPod

As numerous websites have been reporting, yes, the Rolling Stone has pointed out Apple’s iTunes Music Store, even if it keeps up its current sales pace, will still fall short of vinyl sales this year. Our colleagues have left out some very good news from the same Rolling Stone article, though — but what would mostly Windows sales mean for Apple’s future? Click read more.


As numerous websites have been reporting, yes, the Rolling Stone has pointed out Apple’s iTunes Music Store, even if it keeps up its current sales pace, will still fall short of vinyl sales this year. Our colleagues have left out some very good news from the same Rolling Stone article, though — but what would mostly Windows sales mean for Apple’s future?
The Rolling Stone article (which mostly talks about which downloads are the staff’s favorites and doesn’t dwell too much on Apple being outpaced by vinyl) concedes that it’s lack of Windows support that is keeping Apple’s projected sales behind those ancient plastic discs and the rival Windows services. In other words, yes, WE’RE maxing out our credit cards and will be forced to switch to instant ramen noodle diets to feed our “buy now” one-click addiction, but there just ain’t enough of us OS X 10.2 users in the US with credit cards.
It’s not as though the rival services have a whole lot to offer. Roxio‘s purchase of pressplay this week is less impressive when you look at the pressplay service. Songs licensed of pressplay can only be played as long as you’re paying your monthly fee. You need a special “portable download” just to burn a song to a CD or even drop it on your iPod, and it costs extra. Wait — scratch the iPod, it’s not compatible (hmmm . . . only the most popular MP3 player on Mac or Windows). And the files are all in WMA format. It’s not hard to see why Apple saw a window to create their own service. And the “Napster” moniker Roxio plans to slap on its new service, the company’s one prize from its purchase of the empty husk of the former filesharing service, is unlikely to inspire confidence or enthusiasm from file traders who see Napster as having sold out. Apple, in the meantime, has all the buzz. As usual.
If Windows users max out their cards they way we have, Apple’s $33 million in revenue becomes more like $825 million. Nothing to sneeze at, though Windows users may not have the same appetite for downloads as Mac users. So it’s clear that Apple’s got something worth watching. And more important than even those sales figures for the record industry is the good will Apple has earned so quickly. See the enthusiasm of Interscope’s chief in the Rolling Stone article. (Interscope and its artists like U2 have quickly become Apple’s darling in the new service.)
But Apple watchers have reason to have some questions in their minds. Will the iTunes Music Store be profitable on its own, or is Apple just trying to feed sales of the iPod? And when will Apple articulate its cross-platform strategy? Ironically, a lot of Apple’s future growth could come from Windows. Unlike the messy task of porting OS X to Intel, it’s also not as though increased music and iPod sales on Windows can cannibilize the Mac hardware platform. So bring it on, Apple.

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