Thursday, October 2, 2008

iTunes Store RIP?

Apple iTunes to become necessarily unprofitable pending Copyright Board decision:

Apple claims to be running the iTunes Music Store to make money. Jobs has said in the past that it "breaks even", and was intended to drive iPod sales. 

The actual reason Apple created the iTunes Music Store was to ensure that the nascent paid-download music industry did not become a plank in the platform of a non-iPod-compatible, costly, and likely Mac-hostile company. I am referring to Sony and Microsoft, of course, who both stated a desire to innovate "in the living room." If either wedged their DRM into the vast majority of homes, Apple, Mac OS X, and the iPod would be choked off and stifled. 

Apple preternaturally understands this market, as evidenced by the iPod itself, and decided to own music downloads as a defensive stroke. If it becomes unprofitable, or infeasible at anything besides punitive or brand-sullying pricing, then Jobs will allow it to wither. It is no accident Apple has not played hardball with the non-EMI labels about their DRM-free stance on Amazon. A track from that store is not necessarily destined for a non-iPod, as a WMA or Zune DRM, or Sony Connect song, would be.

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