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 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.

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