iTunes put to the test
 

Apple Inc.'s iTunes music store is under attack from several fronts.

Walmart has just started selling RDM free downloads from walmart.com. $0.94 per song (as opposed to iTunes' $0.99 per song). Universal and EMI have already signed on (everyone from the Rolling Stones to Coldplay to Nelly).

GBox, for $0.99 per song, can now also supply DRM free mp3s from Universal and Songy BMG. Not only that, but you can embed wishlists (gay!) in your myspace.

Information Week has also announced that MTV, Verizon, and Real networks have combined forces to provide music via Rhapsody America.

Yeesh.

So now we have the same idiot music companies that insisted on DRMs in iTunes giving away their mp3s to other services DRM free. I'd call that a big fat stab in the back, and I hope they all burn in hell (Willravel, tell us how you really feel!).

What is DRM?

DRM = digital rights management. It restricts usage.

DRM was always a bad idea and Apple just had the bad (good?) luck to be the first really successful online music store. They've made PLENTY of money on it, and I would think that their lawyers will be able to get them out of selling DRM music if all these other companies are going to be selling DRM-free music.

DRM doesn't serve any purpose unless everyone uses it, so holding Apple to it when others are selling DRM-free music online doesn't make much sense.

You're absolutely and completely right. Apparently, Apple does have DRM free music, but it's $0.30 more than the normal $0.99 price of the song, which puts it way outside the rest of the market as far as price. If Apple could switch over to DRM free music for their normal price, I could see them easily fending off these newcomers because iTunes is already so well established. If that doesn't happen, there could be serious problems for iTunes and thus Apple. Apple is fortunate that the iPod plays non-DRM audio and video, otherwise this would put the whole company into trouble.

I seriously doubt that. I seem to recall some statistic out there that less than 1% of iPod users have purchased anything from the iTMS. The iPod will still work great without the iTMS, and I don't suspect that the iTMS is a major income source for Apple.

However, I know you are closer to the industry than I am.

Well right, the iPod isn't dependent on the iTunes Music Store, so it's not a problem. The thing is, the investors (including Willravel), can be shook by stuff like this because iTunes actually is a huge source of revenue. Right now Apple is stabilized by the iPod and the MacBook Pro, even surviving the iPhone, but the Music Store is still a big concern, and a lot of it has to do even more with how the market view the Music Store. Obviously, DRMs aren't popular with anyone but music industry CEOs, and while some people are willing to submit, it's damaged the sales of music from the iTunes Music Store in an incalculable way. Now that the DRMs are no longer being required by the industry, it's up to Apple Inc. to push for the same treatment or run the risk of falling behind.

Any Apple person can tell you, style gets your foot in the door, but at the end of the day it's not style that earns the paycheck.

I wouldn't have thought so - there doesn't seem to be that much space for margin on it. But you are an investor, so you see the numbers. Do you recall what % of their profit comes from it?

I'll have to check when I get home.

according to wikipedia the US iTunes store has had more than 3 billion downloads. I would think the european store is upwards of the same number.

That's a lot of money flowing into someone's hands.

On September 5th is supposedly coming a big announcement. It likely will be a new video iPod. Whether or not it will have wireless direct-to-iTunes-store connectivity is yet to be seen. That would certainly shake up the downloadable-music market.

Agreed.

*psst, everyone buy!!*

If there's an iPhone-like iPod with at least 60GB storage, I'm there. Otherwise, my 4th gen 60GB will have to suffice.

I've been reading all the rumor sites, and I'm going to put a prediction out there that I haven't seen elsewhere yet. Assuming that my above wish comes through, I also expect a significant software update to the iPhone with some new features (Spotlight?).

Here's a thought for you...if Apple starts offering DRM free music for it's current .99 pricepoint, will the DRM music still be .30 cheaper?

That would allow them to start advertising songs for .69, which is quite the ad.