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A lot was made of Napster and Bear Share and the other client based means of sharing music and movie files. Many claimed that the "sharing" concept was the future of the music business. Meanwhile CD sales plummeted and record companies laid off thousands of workers. Bands made less money than ever before, but still you heard the ignorant screaming that sharing was the future...
Fast forward to 2002, Napster is put out of the sharing business by the courts. Users of other sharing software are prosecuted for stealing copy written material and in late 2002 Apple computer releases "Itunes” for the Mac operating system. In 2003 Itunes is released for the PC platform and Napster is relaunched, this time as a pay as you download website.
Itunes, however, is revolutionary in that it has excellent branding (the Apple Computer name behind it and Steve Jobs being its voice), an easy user interface, and all songs cost you $.99 with an option to buy the whole album for a discounted price. Although Napster is competitive I don’t believe they are going to end up being a real player in the legal download market because the people that used the site most likely will not pay for the music that they were stealing before for free. They are so spoiled from stealing the music that they will no longer pay for it. This attitude eventually will defuse and disappear once the illegal sharing software becomes harder and harder to get and as more and more people are prosecuted by the record companies.
What is the main reason that people do not go out and buy CDs? They are worried that they pay $15 and end up with one song that they like. Itunes completely solves that problem. You buy only the songs that you want and you don’t have to pay for the ones that you don’t. You have the option of sampling the music before you buy it.
In the first 2 days of having Itunes available for Windows Apple reported 13 million downloads. I see Itunes and services like it ultimately the answer for the music business.
It is going to make the demand for singles much much higher and the demand for albums and CDs less. Instead of seeing artists sell 10 million records they may end up with 50 million downloads, because there simply is no risk!
I believe that people will be much more likely to buy more music more often with the new system. For your $15 you will get 15 hit songs rather than one album. Think about that. There won’t be the risk of paying for music that you just don’t want. The demand for good music will increase and people, especially people in older demographics will be more likely to buy music for themselves. Within 5 years I think that Itunes will see a billion downloads a year. This is the new market the record companies have been looking for and it will help bring them up out of the doldrums. The real question is will they be able to build themselves into companies that can work within the new system or will they become extinct leaving the market to the artist management companies.
This relates to independent musicians as well. Web based CD distributors like CD Baby are making deals with Itunes. What this means to you is that your music will be available to hundreds of thousands of music shoppers who want to hear solid new music. If you have a hit song and people sample it, love it, and download it you will make great money and the marketing capital that you will invest will be little or nothing. You won’t have record companies telling you what you have to do and you will have complete creative control. The future is here now and success should be that much easier for independent artists. Keep an eye on Itunes, it might be an avenue where you could have a lot of success.
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