The range of the music industry's response to the digital revolution swings wildly from guarded hope to wanton self-immolation. Last week, it veered closer again to suicide.
At issue is iTune's control of 90% or more of all digital downloads in the U.S., many of which constitute sales of single songs that are priced at a benchmark $.99/ea. The music labels want to find ways to force consumers to buy entire albums instead (on which they believe they can make more profit), and hike the per-song prices, too.
For the sake of its brand, Apple needs to hang tough. And, while I have dear friends in the music industry who kindly remind that I don't know what I'm talking about when I dissect their business, there's one primary reason why I think that ignoring the machinations of the record companies could be the most important branding decision Apple could make:
Don't fix something that isn't broken.
I know it's hard to remember, but Apple are the good guys in this one.
When it swooped into the void after regulators cracked down on P2P downloads earlier this Century, it created the best, most simple, obviously workable and thus valuable digital channel connecting songs and consumers. The conduit of iTunes/iPod (and now iPhone) works, which is why the labels want to exact more money out of it.
This was a giant accomplishment for the Apple brand. It once again took the branding out of the realm of marketing communications, and centered it exactly where I believe Steve Jobs wants it to be: experience.
And not experience of ads or storefronts, but the experience of what its services and products do. iTunes/iPod doesn't work because of great marketing, but rather because of the structure and pricing of its unique model. Tinker with it (a charitable view of what would really amount to blowing it up) and, well, you risk blowing it up.
And who would consumers blame? Apple.
Again, if I read one more self-styled branding expert explain why Apple's brand is all about its communications, I think I'm going to puke. People can love the hilarious TV commercials, and dig the cool design of its stores. But it won't matter if Apple craps up iTunes. In wanting to make more money, the labels would accomplish nothing more than making less for everyone involved. And whacking the Apple brand in the process.
Now, I know that the labels, along with a few artists, counter that consumers opt for favorite single songs instead of entire albums, if given the choice, so they don't like giving them that choice. Further, they reference the "artistic integrity" of songs compiled in an album-format.
The album structure is an artifact of an out-dated technology called the LP, on which the number of songs was determined by the physical capacity of the vinyl storage medium. Aside from the occasional concept albums and rock operas, most albums are nothing more than playlists etched in plastic by providers, instead of allowing consumers to self-select them digitally.
And there are enough examples of artists that choose to skip iTunes and market album-only offers. Good for them, I say. I think there's something fundamentally dishonest when any provider forces me to buy a bunch of things I don't really want or care about in order to get at the one or two things I do want to own. It worked in the past, mostly because consumers didn't have another option, not because they particularly liked the practice.
So I understand why the labels reminisce about those days, especially those artists who hope to move lots of musty content off of storage room shelves.
More importantly, I'm all for the labels, along with all of the other players in the technology and distribution space, coming up with new, better ways to get stuff to people. The best way to challenge Apple's stranglehold isn't to gripe about it.
They should figure out how to improve upon it.
In the meantime, I think Apple needs to keep focused on the future, and find ever-newer ways to bring more content to consumers faster, easier and, if possible, cheaper. Parse it, sample it, break it up into bite-sized chunks that make it onto people's phones, keychains, or wherever else media can be experienced. Find more artists, especially new and local ones, and provide an outlet for them. In other words, hang tough.
As the music industry waxes poetic about the pricing models of the past, it should look at more recent experience...and remember that the alternative to Apple's pricing and distribution model isn't necessarily higher prices, but rather no prices at all.
$.99/song looks pretty damn good when compared to free, doesn't it?