MEDIA WATCH: The media likes what it has heard so far from Apple's iTunes

Apple founder and CEO Steve Jobs thinks he has the solution to one of the biggest challenges facing the music industry - the loss of billions of dollars each year because of piracy from Napster-like file sharing. Apple's proposal is its new iTunes Music Store, an idea that generated lots of media buzz even before it was formally revealed to the public in a glitzy, hyped-up unveiling worthy of the dot-com heyday.

Apple founder and CEO Steve Jobs thinks he has the solution to one of the biggest challenges facing the music industry - the loss of billions of dollars each year because of piracy from Napster-like file sharing. Apple's proposal is its new iTunes Music Store, an idea that generated lots of media buzz even before it was formally revealed to the public in a glitzy, hyped-up unveiling worthy of the dot-com heyday.

Apple's ability to secure the backing of the five largest recording companies (Universal, Warner, EMI, Sony, and BMG) has been largely praised for finally delivering the new business model that the music industry needs to adapt to the times. Technology analyst P.J. McNealy told The Boston Globe (April 29), "This is the service we've been waiting for." In its marketing and promotion of iTunes, Apple apparently had numerous talking points it wanted to stress: ease of use, the fact that no subscription is required, the legal nature of the enterprise, the high quality of the downloads, its status as a cheaper alternative to more costly subscription sites, and the readily available catalog of 200,000 songs from all the biggest pop stars. All of these qualities help save time when searching for songs. Of the aforementioned items, the media most frequently latched onto the notion that iTunes was easy to use. BusinessWeek (April 28) reported that iTunes "exudes Apple's trademark elegance and simplicity." Jobs advocated the ? la carte strategy of downloads for 99 cents per song as an improvement on the subscription-based business model of rivals. The New York Times (April 29) quoted Jobs as saying the latter "treat you like a criminal [because of all the restrictions they put on you]. We think subscriptions are the wrong path." About half of the coverage Media Watch analyzed reported that iTunes is only available for Mac users at the moment, but that plans are underway to offer these services to Windows users by the end of the year. Only a handful of these reported that the Mac user audience (about 4% of PC users) was too small for the service to make any impact. Suggestions that iTunes would revolutionize the music industry came not only from Apple, but from music-industry executives and analysts as well. Jobs made no attempt to understate expectations for iTunes as he boldly declared in a lengthy Fortune profile (May 12), "This will go down in history as a turning point for the music industry. This is landmark stuff. I can't overestimate it!" Several media reports looked on approvingly, observing that the launch of iTunes, along with its iPod mp3 player, continues Apple's push to diversify its source of income beyond desktop computers. A technology analyst told the San Francisco Chronicle (April 29), "Five or 10 years from now, we may look back and say this was the point when Apple changed from being a computer company to a digital media company." Since music is still readily available for free over the internet, Apple will have its job cut out for it. However, the media and industry observers often highlighted Apple's reputation for successful marketing. Billboard magazine (May 3) cited the company's "reputation for savvy marketing" and its "ability to generate buzz among consumers" as reasons why iTunes could potentially be a huge success. The consensus appears to be that if anyone can make this business model work, it's Apple.
  • Evaluation and analysis by CARMA International. Media Watch can be found at www.carma.com.

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