Very interesting post from MacRumors.com, on the perceived evolution of Apple’s customer base, to-wit,”consumers want what we don’t have”.
As new players enter the market, the customer’s needs change, this is inevitable in any free-market and it’s something that Apple used to be very good at despite all the dogma that, “Apple abhors focus groups, and doesn’t listen to it’s customers.”
Take the iPod for instance.
The iPod started of in as much the same way as the iPhone, a very expensive, albeit limited answer to a market that already existed.
Over time, new models were introduced, the hardware got a lot cheaper, and every single market niche was eventually filled, from the music-mad (100g+ iPod classic for all your songs), to the teen with limited cash, (the iPod mini/nano), onto the bargain-basement little iPod shuffle.
The iTunes store gained traction and ALL the hardware from the high end to the low-end was serviced by the iTunes store.
To the point we are now at where the competition to the iPod doesn’t exist, it’s been destroyed, other than extremely cheap devices that are little more than USB sticks with a few extras.
Game, set and match.
You can argue that the bottom has fallen out of the iPod market, now that the iPod touch fills most of what remains, however all the iPod line is still on sale.
So why hasn’t this happened with the iPhone?
Where is our iPhone mini or nano?
Where is our iPhone shuffle, or the candy-bar phone equivalent?
While we’re at it, why can’t developers write apps for the AppleTV?
Why doesn’t Apple view the iPhone market, in the same way the viewed the iPod market?
It would certainly work, the AppStore is perfectly capable of servicing every model of iPhone, with apps that can only run on certain hardware, (you can’t view videos on an iPod shuffle like you can on an iPod classic for instance).
Lot’s of why’s, very little answers.
Looking at some of the internal memos that have come out from the Apple / Samsung trial, it’s clear that there’s a struggle going on at the top of Apple, in what they stand for, what markets they should service, and what their profit-margins should be.
It’s clear that Apple needs to get focused and act like a start-up, like they used to.
I know that this lowly blog isn’t totally responsible for this news:
but it’s nice to know that the record companies plan to cripple Apple’s dominance in the downloadable music industry, isn’t working.
Amazon’s entry into the market has nothing to do with consumer choice. They have allowed Amazon to have DRM-free music, because they want to stop Steve Jobs from keeping prices of music low.
If Apple is reduced to an also-ran, then they can safely ignore them when they increase prices across the board, and believe me they would.
Amazon, being the faceless corporate behemoth they are, will simply roll-over and take it up the ass, but Apple? Steve will probably pull out of the industry all together.
Which is what the music industry wants.
Anyway, I’ve always wondered why people have such a problem with Apple’s Fairplay DRM.
It is the fairest out there (obviously), and I’ve never come up against it’s restrictions. But then again, I don’t pirate music.
So, if you are fair with the music industry’s property, you don’t come up against the DRM. It’s perfect.
If you never come up against a DRM mechanism, can you really say that DRM exists?
Anyway, it now seems that Apple is finally winning the battle, with the rumours that they will have DRM-free music shortly. But, I spoke too soon:
It seems that they are still holding out. Time will tell whether they make the right choice for consumers.
I love my iPod. Well actually I love my iPods, because I have 4 of them, but there’s one thing that’s been troubling me.
The hardware changes, the design changes, but the underlying software features don’t seem to change.
Things have moved on from version 1, and I know that Apple like to keep things simple, but there’s one thing I wish they would add, or I could add myself.
More often than not, I’m listening to my music on shuffle, and I come across a song by an artist I really like, and by extension I like other songs by this artist.
Why can I not simply skip to a list that says:
1) Shuffle to other songs by this artist
2) Shuffle to other songs in this genre
3) Shuffle to other songs in this year
Maybe this could be a special section that you could programme from iTunes, so you would have an Applescript that does this, but it executes also on the iPod.
I know that the ‘KISS’ principle (Keep It Simple Stupid), is behind a lot of reasoning at Apple, but time and time again I come across a situation like this in the car.
The only way around it is to navigate back to the top level, select ‘Artist’ and shuffle from their entry – it’s not very easy and probably quite dangerous and distracting if you’re driving.
Maybe now that the AppStore is open we’ll see this, but what with Apple restricting certain apps when they duplicate in-built features, it’s not likely.
I’ve recently subscribed to a new podcast, ‘MacNotables‘ hosted by Chuck Joiner (a great name and a great podcast).
Episode #824 caught my attention, because it discussed in the main, the new Napster music store, and then the topic of the Amazon music store and why the music labels have given more favourable terms to other music stores at the expense of giving them to Apple.
Now I’ve discussed this before here, and I feel I make a valid arguement that the reason why this is happening is nothing to do with consumer choice, but is mainly about the music companies getting their industry back from Apple, so that they can control it again, and raise prices, re-introduce DRM, and make even more money for themselves.
But after listening to this podcast, I can see that even the most intelligent and insightful Mac-pundits simply cannot see the wood for the trees (or the music for the albums as it were).
Andy Inakto Innhakto Ihnatko, (who joking aside, have enormous respect for), is totally wrong here.
In listening to the quite heated discussion amongst the protagonists in MacNotables #824 episode, the conclusion I can draw from Andy is that he feels that Amazon’s music store is a good thing, and iTunes could do with the competition.
He uses iTunes to search for music and listen to the samples, but then goes to Amazon to buy it.
To save what amounts to a few bucks.
Every buck he saves erodes Apple’s dominance, and further entrenches Amazon’s.
Now I’ve nothing against Amazon, I use it all the time to buy stuff, it’s the way in which Andy, and others like him have been totally suckered by the recording industry to effectively allow them to, sooner or later, completely ignore Apple when they argue with them over pricing.
And when that happens, all those little bucks that Andy has been saving, will be won back when the recording industry is allowed to raise prices, because they can safely ignore Apple again.
Well done Andy.
Recent developments in the market place for digital downloads of music have resulted in iTunes being seen as the black sheep in the family.
Although Apple have made a lot of money for the record companies, (Apple sees iTunes as a break-even arrangement, taking very little from each song sold, making money from sales of hardware instead), the record companies are not happy.
iTunes success, has resulted in Apple having a great deal of power in terms of the prices they are willing to sell music at (regardless of what the record companies want), to-wit – we see prices on iTunes remaining pretty consistent across the range.
This benefits the consumer, (who are Apple’s main focus here), for other online retailers who have allowed the music companies to dictate pricing terms, have not been as successful as Apple, hence their almost complete demise.
This has irked those record companies greatly, for they are used to having almost total control of their industry.
So we have seen a change of direction; they have now started offering competing online music providers, different, and much better terms and arrangements to sell their music, while Apple is left out in the cold.
We’re seeing no DRM, better choice of music and lower prices in competing services.
Most, if not all the media see this as a benefit to the consumer, and a sign that the record companies are finally giving in and embracing the future, and hey, iTunes having competition is a good thing, right?
They’re wrong. Why? let me explain.
Apple have remained steadfast in their demands that pricing on iTunes is consistent. The record companies wanted tiered pricing, and Apple correctly stated that one of the reasons why iTunes was successful, was the ‘across-the-board’ pricing.
The record companies then realised that this was a battle they could not win, unless they sacrificed a couple of things in the short term, to win back something in the future.
These 2 things are DRM, and pricing.
They sacrificed DRM because a) of a change in customer demand and media momentum which they couldn’t control, and b) to give them leverage against Apple, hence the offering of DRM-free music to the linkes of Amazon.
They sacrificed pricing to again, give them leverage against Apple, but only temporarily.
Why do they want leverage against Apple? They want this so they can bring competitors to iTunes dominance.
Is that not a good thing though? NO IT ISN’T.
Why isn’t it? Because 5 years from now, if they are successful and iTunes dominance is eroded to the point where the record companies don’t have to listen to it’s demands, what will be left?
You will have the record companies on one side, and on the other side a number of partners who will not be powerful enough to dictate pricing terms, as Apple has in the past.
What will then happen?
PRICES OF ONLINE MUSIC WILL RISE. GUARANTEED.
They will then be able to do what they like, kill online music stone dead if they want to and return to the more profitable and controllable model of CD’s, or worse.
Do I have any proof of this? No, of course not. But answer me this, if this isn’t true, and the only reason why the record companies are doing this is to bring competition, cheaper prices and no DRM to the industry, then why don’t they let Apple join in now?
By not letting Apple join in now, they seek to erode its dominance, and they want to topple iTunes, so they can get the pricing back under they’re control.
So the next time you buy music online from Amazon, just remember that you giving more power to the record industry with every purchase, and taking power away from Apple.
Apple want to keep music prices cheap and consistent, the record companies want you to pay more. Just remember that.
DRM. Three little letters that seem to mean so much to you.
You pretend that you created DRM to protect those people in your care, your recording artists, film makers & authors.
However, what you fail to understand is that your firm, unrelenting grasp of your media, is squeezing the very life out of it, drop by drop, and if you do not change, it will be mortally wounded, if not stone cold dead within a decade.
Let’s put our cards on the table here, DRM was created by you, not to protect your recording artists’ sales, but to protect an old and outdated distribution model, (physical CD distribution), from the digital download age.
You see digital downloads as a danger, a danger to your current cash-cow, CD’s.
The ease in which CD’s can be ripped to a PC and therefore be easily, and illegally shareable on peer-to-peer sites is something that you grudgingly accept – you failed to see it coming.
There’s very little you can do about it now (short of installing root kits), so your current approach is to keep the status quo as long as possible. CD’s can be ripped to MP3 and distributed with ease, but it still isn’t an easy process in comparison to taking an non-DRM’ed MP3 file and giving it to someone else.
You know however that this is a temporary situation, the future is almost here – complete digital downloads of media, in all its forms are inevitable, once the pipe is big enough.
Every new step forward, (in the past from LP’s to CD, at present from CD’s to digital downloads) you now take with the utmost care, nothing is left to chance. You failed to see the ripping of CD’s to MP3 coming, you won’t let that happen again.
So you enforce draconian DRM on iTunes purchases. It was only the forceful personality, and resourcefulness of Steve Jobs that gave us the option of getting around this DRM easily (by ripping to a CD).
And you enforce even more draconian DRM onto Windows Media Files, and even manage to get kickbacks from every Zune purchased. This was a lot easier because of the willingness of Microsoft to cooperate. Microsoft do not care about the ordinary consumer, just like you. To them they are the lowest of the low, to be controlled like sheep, under the watchful eye of an IT Administrator, or in this case, a faceless corporation.
So here we are at the present. A time of conflict, confusion & struggle – and it doesn’t have to be like this.
Instead of staring at our feet, at where we are today, let’s look to the future, at where we’d all like to be, and plot a course on how to get there.
Seeing as this is all about protecting your current business model, let’s look at what your actual current business model is.
You have a recording artist you wish to sell records on behalf of. You do this by displaying their currently released track in various advertising mediums – on the radio, TV, billboard posters, adverts etc. The mix of these mediums is dependent on your target audience, but the path this audience takes to purchase (and therefore fulfilling the marketing exercise, i.e. making money), is always the same.
The target audience is exposed to the medium, say through the radio and likes the sound of it. But what happens then? Can they purchase that medium? No, they cannot. The medium has to (hopefully) have made such an impact so as to have stayed in their memory (billboard & press reinforce this), so that when they just happen to pass an outlet where they can buy they physical media that they heard, they can finally complete the purchase which started out with the time they heard the song play on the radio, sometimes weeks previously.
It’s not very efficient is it?
The period between the exposure to the medium and the purchase is too long. A lot can go wrong in this period of time, including the target audience forgetting all about your product. This is why the song must be played again and again on the radio, why you must spend huge sums of money on billboard & press campaigns – your marketing plan is too complex.
There’s a famous acronym in marketing and it’s K.I.S.S. Keep It Simple, Stupid!
In contrast, look at the iTunes Store. You launch the application. You may have many reasons to do this but it’s mainly because you want to play one of your songs. You look at the mini store, or click on a store link next to one of your favourite artists. You go straight to the store, play the song, like it, purchase it. 30 seconds later it’s on your iPod and you are listening to it.
Steve Jobs’ unexpected ‘Thoughts On Music’ posting took not only the tech world, but the music world by surprise. If any one thing demonstrates the power that Apple have today it’s statements such as this. When Steve speaks, the world listens, when Bill Gates, Michael Dell, Rob Glaser, or other tech luminaries speak, the world barely glances in their direction.
The statement that Steve made, boils down to this:
For some reason, the wider media have assumed that the reason why the iPod and iTS combo have DRM built in to every item purchased from it, is because Apple desired it, and they desired it because it locks iTS software content, to iPod hardware. This results in the concept that the more content you buy from the iPod, the less likely you are to buy competing hardware.
This apparently isn’t the case.
iTS content is locked to the iPod, and does have the side effect of locking people in to the hardware, but what most, if not all, tech columnists fail to mention, is that this DRM is easily circumvented (and FULLY supported by Apple – no hacks required), by simply re-ripping the DRM’d tracks to CD and re-importing them in to your competing players’ software.
This sounds a little long-winded, but is a walk in the park compared to stripping the DRM from Microsoft’s DRM, which is all but impossible for the average user, and certainly isn’t documented in any way by Microsoft.
Somebody should really let the Norwegians in on this little secret, but I feel that they are perfectly aware of this already and are simply acting on behalf of a certain group of privately owned businesses – I wonder who they could be?
No, the reason why DRM exists on the iTS, is because the music companies demanded it, and not only demanded it’s inclusion, but also demanded that Apple actively fix it, should it be broken.
I myself (unlike the BBC), believe him (by and large).
There are a few questions however. If Steve is so against DRM, and the only reason he agreed to it was to get contracts for the iTS, then why does he not allow DRM-free music on the iTS from indie labels, who are quite happy to give contracts out (such as for eMusic), right now, with no DRM in sight?
Who knows. It could be that the contracts that were signed by the big four, specifically exclude DRM-free music such as this, but even I admit that I’m reaching here.
Or, more likely, Steve was quite happy to go with DRM-free music, but when it was forced on to him by the big four, he saw the potential to sell more iPods and could not turn it down. Don’t forget Apple is a public company and has a duty to it’s shareholders – you cannot turn down the chance of increased profits no matter what your principles.
So, I think that the reason why Steve did this was to clear up the blame for DRM, and to point out to certain European Marxists that it ‘aint Apple’s fault – they need to talk to the big four.
And also, as a little, tiny, eeny-weeny side effect (if this results in DRM being abandoned), it also completely destroys, from top to bottom and inside-out, Microsoft’s entire business plan.
Sorry Bill, what can we say, except ‘whoops’?
Music has been a part of my life for as long as I can remember. The first single I ever bought was ‘Food for Thought’ by UB40, it cost less than a pound, and I must have been about 11 years old. I still own it – although it’s a bit scratched now.
My main musical influences come from my family, naturally. Disco & dance from my sisters, motown & indie from my brothers. But most of all they come from one of my brothers. He’s 4 years older than me and throughout his life he has been a mod, punk, goth, new romantic, futurist and countless other genres too subtle to mention.
Although I did not follow the fashion as much as he, I did follow his music, specifically punk, goth & indie, and this music has stayed with me all my life.
My listening habits however, have changed radically as I’ve moved from year to year throughout my life.
Early on (from 12 to about 14), I bought nothing but singles & albums. I was heavily influenced by advertising, and spent most of my pocket money in this area. Music to me at this point was a commodity that you listened to, liked and then bought. It wasn’t until I suddenly realised that there was no reason to do this that I changed to…
…tapes. From about 14 to 19 I spent a considerable amount of time swapping tapes between friends. I hardly spent any money on music, just the very occasional album. Music to me at this point was more about quantity than quality (in terms of recording), and I amassed a huge collection of taped albums (200+).
This changed again when I left school and went into higher education. My music tastes became much more condensed and due to the arrogance you feel at this age, I exposed my self to a narrow range of music. However my appreciation of good quality music (in terms of recording), grew and I found myself purchasing more LP’s, EP’s, CD’s & singles that at any time in my life, indeed this is where most of my current record collection comes from.
But this didn’t last. On graduating, and finding a job (at around 24), money became very tight. Over the next decade or so, I married, had a family and purchasing music was at the bottom of my very long list. Any music purchases were usually compilations, with a little bit of taped radio.
But then came iTunes (in the UK).
At first my interest was piqued, but I still didn’t have much spare cash, so purchases were few and far between, i.e. zero.
It wasn’t until I bought my first iPod (a 4gb mini), that things started to change, and music started to take the centre stage again, (well a bit to the right of centre).
At first, I transferred all of my CD collection to the iPod, at least the tracks I liked, this maybe filled a third of the iPod. Then after a few months of realising what a difference carrying 300 of my favourite songs around with me meant, I wanted to transfer all the songs I ‘owned’.
I say ‘owned’, but I didn’t really own them as such, some songs were on LP’s and singles, so these were legal, however I had a huge collection of taped songs that I wished to transfer as well, these I certainly did not own.
But I transferred them anyway, filling my iPod almost to the brim, and our story is almost to the present day.
What I am presently doing is, slowly but surely, is buying (when I have the spare cash) all the taped songs I do not own from iTunes. Now, this isn’t because I feel guilty about have illegal songs on my iPod, no. It’s because the songs I transferred from tapes I REALLY like, and I want to own the best quality recording of them (at least better than tapes, I know that iTunes quality is debatable).
iTunes is the most convenient way of doing this, it’s simple, cheap and legal.
So this is my musical journey from child to man, and the record companies should take note of this. Is my journey typical? Yes, I’d like to think it is.
Note that at certain times during my life, I have been a rampant pirate. But this had nothing to do with me being a criminal, or making any money. It was do to with the fact that I love music, and I would do whatever it took to listen to music with the funds that I had available at the time.
Indeed, the music industry, allowing me to easily pirate songs, actually increased my exposure and love of music to such a degree, that I am now, as an adult, and avid music purchaser.
If the music industry, back in the 80’s, had started taking me and my friends to court because we shared tapes, our love of music would have been stifled by the fact that our exposure to music would have been greatly reduced. Therefore, at a later date when we had the funds to purchase music, we would purchase a great deal less, and maybe none at all, spending our money to fund a different interest altogether.
The music industry does not seem to grasp this. They seem to not understand their own industry, or the way which their customers have been exposed to, and bought music in the past, and seem to be resisting the changes that are now taking place, which will radically change the way we all buy music in the future.
They must change, because no matter how hard they try, we will not. This is marketing 101, you have to react to your customers buying habits, if you don’t then you are finished.
Maybe they are finished, they just don’t realise yet. All I know is, is that my children will do exactly as I have done, in terms of purchasing music, no matter what the music industry wants.