RWW Predictions: Walmart's MP3 Store VS Apple iTunes
Written by Corvida / November 2, 2008 7:05 PM
/ 5 Comments
Last month Walmart gave consumers the number 1 reason why DRM isn't the answer when they announced that they would be shutting down their DRM server come October 9th. Since then, Walmart relaunched it's online music store on Tuesday. The new music store offers the latest hits at only $.79 per song, while standard songs are offered at $.94. With competitive pricing options Walmart could give iTunes stiff competition.
We'd like your help in predicting the following: Will iTunes change its pricing from $.99 a song or go to a subscription music site by the end of 2008?
Fast Facts
- Microsoft's Zune Pass music-subscription service allows unlimited music downloads for $15/month
- Every song sold on Wal-Mart can be played an unlimited number of times on most portable devices
- Rumors have surfaced that Apple is considering a $129.99 a year subscription service for iTunes
Comments
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You have to remember that flat 'subscription' pricing gives the music industry little or no incentive to do ... anything, really and certainly not engage in active A&R and promotional work because it would result in zero additional revenue. My point being that if Apple want to, at some point, become the "new" music industry then a subscription model would prevent them from doing so.
If iTunes goes subscription I will do a jig in the middle of times square with nothing but a thong on. Not gonna happen. Plus Apple (and nobody else) wants to see that.
The subscription service model is highly unlikely -- subscription models require MORE DRM, not less, which would be a foolish maneuver at this juncture. Other services using a subscription model are already having difficulty gaining traction in the marketplace, whereas the companies choosing to go DRM-free have quickly risen to the top of pile -- iTunes already offers a third of their catalogue DRM free (and growing), and next up is Amazon's MP3 (and entirely DRM-free) service, with WalMart following suit.
I'm not entirely sure what your second fast-fact has to do with the question posed: the DRM in use doesn't hinder the number of times you listen to a file, merely how many computers are authorized to listen to it. So in that respect, Walmart's shift to a DRM free model hasn't changed anything.
As far as Walmart going DRM-free having a serious effect on Apple's stranglehold of the marketshare is concerned, I wouldn't hold my breath. A prime example is Amazon's MP3 service. DRM-free, from a major brand, and has quickly grown to become (arguably) the number two online music service on the market, and yet Apple's marketshare has continue to grow, and only a reported 10% of Amazon's MP3 users had used Apple's music store in the past. Given that up until now, Walmart was selling WMA files only, they have the momentum of their past to overcome to start attracting music buyers that would remotely overlap with iTunes users.
It would be nice to see a price drop on iTunes, but realistically, they've got a solid system currently, and other than continuing to migrate away from DRM, I don't think we're going to see it change any time soon.
^Nabil is on point. Why would iTunes shift their strategy when they still occupy 75%+ of the digital paid-download space? Exactly...they wouldn't.
I still believe Amazon represents the biggest challenger, but it'll be a good year+ before iTunes makes a move to combat Amazon's quietly growing share. And it won't be subscription, it'll probably be variable pricing..
Will walmart do the same thing to the music community that they did to the communities that they helped to crush by lowering price to the point that local business could not longer compete.....And now what do we have....Nice large bleak black top parking lots where we gladly gather to buy products and pay one of the very companies that helped to bring about the demise of our down towns, our city cores are gone now...We are pushed to the high way exits and to the "strip" malls...where the bright and shiny empty brands are....
Artist and content owners...many of your songs are about change, a better way....if you believe in the words that you sing; you should think about who is selling your as well as where your content is sold..