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Friday, November 07, 2003
The Reg notes that Apple's only barely breaking-even, and then proceeds to draw seriously alarmist conclusions from that fact, about how Apple's given a 'perpetual monopoly' to the oligopolist record labels backed by restrictive DRM.
This is all wrong. First of all, iTunes was never going to be a serious money-maker for Apple. What it is is a brilliant way to build consumer share and thus support their networked hub strategy. Second, Apple hasn't given 'control' of a new distribituion distribution to record labels - only consumers can legitimize a distribution channel. Third, the Reg completely overlooks the fact that strategically, iTunes is only successful if it sells more tracks than people woul otherwise download - and that hasn't been assessed yet.
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