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Summary:

If Apple’s iTunes LP format was supposed to give music fans a new reason to buy albums instead of individual songs, its impact on record sales has been a major disappointment. Six months after its introduction, the format is more a curiosity than a game-changer.

When it was first unveiled, Apple’s new iTunes LP format -– codenamed “Cocktail” and introduced at a “rock and roll event” in San Francisco -– promised to give consumers a new reason to buy albums instead of individual songs. Offering expanded cover art, lyrics, videos, animation and other digital goodies, iTunes LP was intended to evoke the feeling of spinning an LP record and holding the jacket in your hands. Especially when paired with a tablet computer (then rumored, now real) that would provide a new way to view large-format art, consumers were promised a digital experience that mimicked a physical one.

Six months later, however, iTunes LP doesn’t prompt much consumer recognition, and none of the industry sources with whom I spoke said they viewed it as being anywhere close to game-changing from a format perspective. Rather, it’s considered more of a curiosity. Like an enhanced CD or a DVD packaged with a physical album, iTunes LP’s bonus materials may interest super-fans, but they aren’t generating much buzz among mainstream consumers, and don’t appear to be stimulating LP sales at all. “It’s something most people will look at once,” is how one person put it.

It’s somewhat ironic that the very company that atomized the album in order to sell individual tracks -– one of many causes for the music industry’s decade-long tailspin –- has encouraged the rebundling of songs with iTunes LP. But I’m told by an industry source who preferred to remain anonymous that iTunes LP wasn’t Apple’s idea in the first place. Rather, it’s the result of the same renegotiations between Apple and the major record labels that yielded DRM-free songs and flexible pricing early last year, a concession by Cupertino to make a gesture in favor of album sales as consumers increasingly show a preference for digital singles.

One person who worked on an iTunes LP project said Apple subsidized the initial group of LP editions, which were created by the company’s handpicked third-party developer at costs of up to $60,000. All are issued in “deluxe edition” releases that feature extra tracks, typically priced a few dollars higher than iTunes’ customary $9.99. Neither Apple nor anyone else I spoke with was able to break out sales figures, but sources in various parts of the music industry agreed that the financial impact of iTunes LP on record sales has been tiny, if it’s had any effect at all.

Only 29 LPs are currently for sale in the iTunes store, about a dozen of which were available when the format was launched. Several are catalog albums, meaning that only a couple of new releases each month appear as iTunes LPs. The same person who participated in an iTunes LP project said, “If it costs $50,000 or $60,000, we’re not going to do it again,” although at the same time, acknowledged that Apple’s extra promotion of the release in conjunction with iTunes LP helped it become a moneymaker after all.

Not every project will cost so much. Apple opened a developer kit for iTunes LP in the fall, enabling artists to craft album packages independently. Direct-to-fan marketing tools developer Topspin Media handled a December release for Pixies spinoff band The Everybody, touting it as the first iTunes LP release sold outside the iTunes store. But a Topspin spokesman told me interest in iTunes LP was generally quite meager among artists with which Topspin had worked.

Although the format was initially seen as tailor-made for tablet computing, Apple hasn’t yet done much to promote the iPad as a music device. When Jobs stepped onstage again in January to introduce the iPad, iTunes LP was barely present. The music segment of the presentation was less than 60 seconds long, and although an iTunes LP was visible as Jobs spoke, he never mentioned the format. No one I spoke to said the imminent availability of the iPad had generated interest in new iTunes LP projects.

As it turns out, most artists and labels are pursuing a different avenue for their digital goodies: iTunes’ wildly popular App Store. Numerous artists have released lyrics, videos and other content in both free and paid apps, which also serve as channels for artist news and can be updated with new content anytime.

It’s still possible that once a few million iPads are in consumers’ hands, and with a few more ambitious iTunes LP releases — like the 760-megabyte package for the new album from Gorillaz — the format will prove to be an essential component of a digital album. It’s also possible that iTunes LP will continue to have a miniscule financial impact on record sales, merely providing a small bonus for a dwindling audience of album-oriented fans. At least with its effort and investment in the format, Apple can say it made a redoubled effort to undo the damage it did to last century’s record industry by selling songs one at a time.

Related content from GigaOM Pro (sub req’d):

By Paul Bonanos

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  1. Did The Man seriously think we would pay for this?????

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  2. “Apple can say it made a redoubled effort to undo the damage it did to last century’s record industry by selling songs one at a time.”

    I grew up in the 45 single era so Apple didn’t damage anything for me, the labels did. Apple re-enabled my preferred buying mode. And, I do buy. I never would have if it had remained albums.

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  3. Chris Albrecht Tuesday, March 9, 2010

    I pre-ordered the Gorillaz and Broken Bells new albums through iTunes and indeed the LP was a curiosity for each.

    A disappointing curiosity.

    The Gorillaz one in particular just felt like a rehashing of their old web site from 2003. Click to see pictures. Click to play a game. Click for a background story about a made up cartoon band that I have no interest in reading.

    The Broken Bells had a visualizer that was “animated” to the music, but if the first song is any indication, it’s incredibly dull.

    Record labels should save the money they would spend on such extras and just let us buy songs for 99 cents again.

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  4. Apple is not the problem. Today’s albums are. No more originality. Guys, why spend a $9.99 on iTunes for 1 or 2 songs you won’t even listen to next year? I mean, there was a time you had Michael Jackson’s “Thriller” and “Off the Wall”… 100% masterpieces. You could spend $25 for each. You had Pink Floyd, The Police, Earth Wind & Fire, Bob Marley, etc… These people use to put together ALBUMS – made of many great songs merging into a concept!!! Even Madonna with the “Like a virgin” LP had about 7 or 8 great songs on it. She was commercial, but threw out good music. I’m not even talking about George Benson, Prince, Loose Ends, S.O.S Band, Parliament/Funkadelic, etc… You had to own the complete thing!!! Please name me at least 1 of today’s pop artist who had you want to buy more than 3 songs of her/his latest “album”… That’s why the album concept is dying… Jay-Z claims to be legendary… BS… well OutKast don’t even have to claim it, they GOOD do music and have sold complete albums. Yes they didn’t sell “2 good songs among 10 crapy ones” albums!!! When you have more artists like OutKast or Alicia Keys, iTunes LP format will fly of the iShelves!!!

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  5. When I first saw the LP tools, my thinking went in a different direction. I couldn’t care less about “digital music albums,” but I am very interested in interactive content – and there’s nothing about the tools that limits you to creating digital music albums. A print magazine could, for instance, create a digital “version” of their content very quickly and easily. Or a game premise like the Miller’s MYST. Or a piece of interactive fiction with graphical components – like a that graphical novel or comic book… Obviously, the iPad makes the distribution of this type of content much more attractive than a 4″ iPhone screen…

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  6. [...] Read | Permalink | Email this | Comments [...]

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  7. [...] DRM/price negotiations and not Apple's idea. This is why you're failing, music labels! Read more: GigaOM – Apple’s iTunes LP 6 Months Later: LP What? , – Ars Technica – A peek inside an iTunes LP file about March 9, 2010 3:10 PM – by Jeff [...]

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  8. [...] Read | Permalink | Email this | Comments apple concessions drm gigaom itunes lp itunes-lp ItunesLp program record-companies [...]

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  9. [...] fun with the headline, it is late it the day and some steam needed venting. It turns out that the iTunes LP Format has not been selling too well: Six months later, however, iTunes LP doesn’t prompt much consumer recognition, and none of the [...]

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  10. [...] Store: All Your Apps Are Belong to Apple: The iPhone Developer Program License Agreement Apple’s iTunes LP 6 Months Later: LP What? Pink Floyd, EMI Brawl Over iTunes [...]

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  11. [...] why did Apple's supposedly revolutionary format fail? Well, GigaOM points to a number of different factors, one of which is price. And we don't mean the price for [...]

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  12. I remember what I first thought when iTunes came out: “Finally!”. I was sick of buying albums because I liked one song, and kept thinking why can’t I just buy the one song. When I was a kid, I would buy cassettes of singles for $2-3, and I was so happy. I didn’t want to be forwarding cassettes, and later I hated having to forward on the CD players (though, it was certainly easier and less time consuming). But most of all, I despised having to pay $16 for a CD that upon finally review turned out to be a flop.
    And has everyone forgotten Napster and all the other peer-to-peer networks that we distributing whole CDs and individual songs for free! That’s what brought on “the music industry’s decade-long tailspin”; if anything, Apple’s iTunes rescued the music industry from its inevitable dive into oblivion. People didn’t want to buy albums in 2000 anymore than they do now. Singles are the future, and maybe the music industry just has to evolve with the times and technology. Time to move forward, that’s what Apple does all the time.

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  13. [...] GigaOM wrote Tuesday that industry sources said the iTunes LP format, in its first six months, has sold to enthusiasts, but has failed to catch on with mainstream consumers or to stimulate sales of full-length albums. [...]

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  14. It’s a shame Apple misnamed this “LP.”

    LP is a vinyl analog phonograph record.

    A Compact Cassette is not an LP.
    A CD is not an LP.
    A digital album is certainly not an LP.

    I’ll keep my Shaded Dogs and London Bluebacks, thank you very much.

    http://en.wikipedia.org/wiki/LP_album

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  15. [...] Read | Permalink | Email this | Comments [...]

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  16. Sadly, we created a format for LP-like experiences and notified Apple of our ability to auto-build such applications from templates. Apple decided that we were unable to embed music as the labels we dealt with wanted. They also didn’t really want to sell both types of experiences, one outside of the iTMS.

    Embedding or packaging is necessary for a world where AT&T is king. Sorry. LP was never going anywhere because that is not what the labels wanted. If they wanted to stream music or require iTunes, they would pull there music out of every other store. Multi-platform is a requirement and the ability to play on a level field. Apple will/could still win openly. It is really a shame.

    The next stage is more apps, not fewer. In the next stage, the apps know what they do and other apps you might like. They download music to iTunes from the separate experience. Like it or not, it is coming, not because of the technology but because of the requirements.

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  17. [...] were available at launch. n So why did Apple’s supposedly revolutionary format fail Well, GigaOM points to a number of different factors, one of which is price. And we don’t mean the price [...]

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  18. [...] why did Apple’s supposedly revolutionary format fail Well, GigaOM points to a number of different factors, one of which is price. And we don’t mean the price [...]

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  19. It’s a shame Apple misnamed this “LP.” also Apple misnamed the iPad. Fail Apple products.

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  20. [...] maggior parte degli utenti preferisce ancora acquistare singoli brani? Secondo quanto riportato da GigaOM, che cita fonti interne al settore, gli iTunes LP sono un pegno che Apple ha dovuto pagare alle [...]

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  21. Alternate Options Wednesday, March 10, 2010

    The labels should feel lucky when someone spends a dollar or two on a couple of songs. All corporate CD’s suck and usually have 1 -3 decent songs. Why would I want the entire CD(digitally or otherwise) if it only has one song I want? I mad the mistake of recently buying a Timbaland CD and to little suprise, the two radio songs off of it are the only ones worth having. I will NEVER purchase a CD from a major lable again. Indie or nothing.

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  22. YOu can go to websites to see stuff about your band.

    I think they should have offered this stuff separately for the price of a song.

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  23. I’d buy an iTunes LP, if there were any from artists who had an entire LP worth of good material worth buying..

    Apple should bring back QuickTimeVR/sprites and add tools to Aperture/FCS to create rich media for the iPod/iPhone/iPad that people actually .. want.

    Put these tools in the hands of podcasters, video podcasters, and independent artists.

    A rich media – Myst-like iTunes LP/Extras version of The Guild DVDs for instance..

    Or a Parrothead party iTunes LP/Extras of a few recent Jimmy Buffett releases..

    There’s allot of potential just out of reach with this.. Add the interactivity of QTVR/Sprites in with HTML5/CSS into the LP/Extras and make the tools readily available. It’s not rocket surgery.

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  24. [...] Apple’s iTunes LP 6 Months Later: LP W&#1211&#1072t? – GigaOM [...]

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  25. [...] Apple’s iTunes LP 6 Months Later: LP What? When it was first unveiled, Apple’s new iTunes LP format -– codenamed “Cocktail” and introduced at a “rock [...] [...]

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  26. François Lafrenière Wednesday, March 10, 2010

    The iTunes LP format is redundant. Even using the default interface, iTunes, iPods and the Apple TV make it easy to purchase and listen to full albums, and they’re even pretty good about putting album art forward. Not to mention a good web site is probably the better place to provide videos, liner notes and other extras to begin with. So why pay a premium?

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  27. very good points made above about how the music labels killed the single to rake in profits with ever escalating prices of CD albums.

    Steve Knopper wrote an excellent book (Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age) on the whole history of how the music companys’ greed almost destroyed them until Apple came along.

    From the Amazon blurb:
    “Instead of embracing the new medium, the record companies insisted on clinging to the old model of forcing buyers to pay $18.95 for a CD just to get the one or two songs they really wanted”

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  28. [...] la tendencia generalizada de compras aisladas de singles. Sin embargo, según el último estudio de Giga OM, las ventas no han sido para nada significativas y el número de artistas interesados en participar [...]

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  29. $60,000 for what is basically a glorified website – no wonder they’re losing money on it. Whoever the genius was that approved spending that kind of money – give me a call, I’ll do it for half that and still make a hefty profit. I would love to see it take off as it’s a natural extension of what I do but people have been down this road before with Enhanced CDs, they didn’t pay for it then and they probably won’t now.

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  30. [...] Apple would make new concessions to the labels, as it did last year when variable pricing, DRM and bundling formats were in [...]

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  31. The problems are promotion and selection. I JUST FOUND OUT about this. I go into iTunes several times a week, but never noticed the tiny link “iTunes LP” on the music page. I only found out because I was watching videos about Apple TV on You Tube since I’m buying one, and one (yes, only one) of the videos showed LP on the Apple TV. I was very excited about LP after seeing how much more I could get out of my albums, especially on the big screen – until I looked at the selection. The LPs are cool enough I’m willing to shell out for a couple even though I wouldn’t have otherwise bought these albums, but COME ON if they really want people to buy these they need to make more artists available. How many people don’t buy it only because none of that handful of artists appeal to them? They need to PROMOTE LP, especially with the iPad now out, and they need to get more bands on board! When you’re playing music on a big screen it’s nice to have more to look at than one static album cover and the name of the song!

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  32. Everyone here has great comments and I tend to agree with most, Apple didn’t kill the record industry, the record industry did. Bundling strategy is done and they are trying to find as many ways as possible to recapture that marketing strategy. Like AK said, there is one sure fire way of doing it, make great albums!

    See more my article called “Piracy? Could You Cry Wolf a Little Louder Please? If you look at the number of digital singles sold and compare that to the number of would be albums sold at a 1 to 2 songs per album rate, you see that music consumption hasn’t gone anywhere, it’s just that consumers aren’t paying $5-7 for the 2 songs they like per album on average.

    HFJ

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  33. a lot of talk about how LP will be so great on iPad, but it seems it doesn’t actually support LP !?
    what a waste of an opportunity. they really did just make a big fat ipod touch!

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  34. The iTunes LP is nothing compared to ScatterTunes V-Album (www.getvalbum.com), which launched months before iTunes LP and has patents pending. The ScatterTunes V-Albums adds much more to the user’s experience, along with providing complete music compatibility to iTunes, with their iTunes Auto Import function. Digital Booklets, full Artist Merchandise Stores, Lyrics, Photos, Videos, live Artist Twitter feeds, and much more, are all provide with in these unique V-Albums. Additionally, unique content, like the digital, high resolution photos of the handwritten original lyrics to many of Jimi Hendrix’s songs on the Jimi Hendrix V-Albums, really bring you into the artist’s world.

    Also, ScatterTunes does not charge the artists and record labels anything for the production of these V-Albums, and artists like Sheryl Crow, are issuing their latest releases in V-Album formats and promoting them on their websites (http://www.sherylcrow.com/).

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  35. [...] As I wrote about before with Callaway Digital Arts, tablets are opening up opportunities to create new publishing experiences that aren’t just e-books, but instead are dynamic applications leveraging audio, animation, pictures and text and marrying them with engaging touch-driven interfaces. Again, Apple tried something like this before with iTunes LP, but there were two problems: it was tied to both iTunes and a computer and it didn’t provide the same type of engagement that a touch-screen experience provides. That’s probably one of the reasons it hasn’t caught on with consumers or labels. [...]

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