Missing the Big Picture

There is a lot of buzz surrounding music labels’ agreements to sell DRM-free music in marketplaces other than the iTunes Music Store. The problem is that they miss the big picture. They don’t pay attention to the two things that really matter.

  1. People want to be able to buy their music easily
  2. People want their purchased music to work on their devices

The iTunes Music Store allows people to easily purchase music. They set the precedence with a $0.99 price point, and everyone is following suit. They showed that if it is easy to purchase music and easy to listen to it again, they will pay that price.

The problem is that with the (barely) exception of Amazon.com’s mp3 store, the price point has stayed the same 99 cents. People will still pay that price, and DRM-free music is certainly enticing for those of us that even understand that. Many people don’t realize that DRM even exists.

To make things worse, some companies try to charge $1.99/song for downloading it straight to your phone. It just doesn’t make sense.

So, you get a less-than-the-easiest interface for downloading music, and it costs about the same or more, and these companies want to bite in to Apple’s market share? I don’t think so.

If they want to bite into Apple’s bottom line, they need to offer something more than what iTunes offers. Yeah, it is DRM-free, but other than that, there is nothing.

Russ Crupnick, senior analyst for NPD group had it right when he said:

“When you have 80 percent market share on Apple devices…there isn’t much demand from people to get unprotected music. They don’t seem to encounter any issues with it.”

I am a big fan of tossing out DRM and all, but differentiating in only the DRM category is not enough. These DRM-free shops will get the Apple haters, but not much more.

To make themselves stand out and sell more, make a daring move and sell the music for much cheaper. People will continue to buy music from iTunes until something better comes along. Is it greed? If I could buy two songs from one vendor for the price of one iTunes song, and the quality was just as good as anywhere else (if not better), what would stop me from buying those two songs instead of downloading one song from iTunes? Nothing but ease of use. If the song could be downloaded and automatically added to my iTunes Library, I would do that in a heartbeat. Who wouldn’t?

Pirates will exist as long as it is easier to steal music than it is to buy it. Allofmp3.com had a good idea when pricing songs by the data size instead of a straight price. It was illegal which is not cool, but many people went to great lengths to purchase songs from that website. You could get between four and seven songs for the cost of one iTunes song. Music labels can create a site just like that and iTunes would immediately feel the pain. It would be so easy to get a lot of music for so cheap, that many people just wouldn’t bother pirating music. There will always be those who break the law, and so there will always be people who pirate music. But instead of borrowing a CD from my friend, I would much rather just go to a website and buy the album for a couple bucks.

People will always want value for the money they spend. If Rhapsody, Napster, Amazon, Microsoft, and anyone else wants to take market share away from Apple, they need to change their tune, start making it easier to get cheaper, DRM-free music into our iTunes libraries, and the money will follow.

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