A thought on iTunes and similar online services

September 10, 2006

What iTunes and similar online services are really selling is convenience and guilt-avoidance, with a small side order of helping out the artists. They're manifestly not selling the music itself (or videos or etc), since you can find them online yourself if you look hard enough.

The 'helping out the artists' bit is currently only a small side order because most everyone understands at some level how little of the money involved actually makes it to the artists.

The guilt-avoidance is not a good long term thing to base your business on, because there's an increasing amount of evidence that the current generation of teenagers feels very little guilt about this stuff to start with. (Partly, I like to suspect, because very few people feel very much guilt about not giving money to visibly rapacious record companies.)

On a legal front, the highest payoff is from closing down non-authorized services that make it convenient to find this stuff on the Internet, because they are your primary competition in the long term.

(Not only is suing individual downloaders time-consuming for a low payoff, but young people famously feel that they're immortal and that the odds don't apply to them, hence I think it has a low deterrent value.)

Odious DRM is thus cold-bloodedly counterproductive because it reduces the convenience factor.

(And iTunes et al can be viewed as a grand experiment in how much pain consumers will put up with before you drive them into the arms of more obscure, non-authorized sources. The early music company online music store attempts have already given us some data points.)

Written on 10 September 2006.
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Last modified: Sun Sep 10 13:52:15 2006
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