Is iTunes still the most expensive digital music service? Which iTunes alternative offers the best deal for music lovers? Are digital albums a better deal than CDs? And just how much are you overpaying if you buy by the track instead of by the album?
Those are the questions I set out to answer in this, the third installment of my “iTunes alternatives” series. My previous installments were in April 2009 and April 2010, and I had planned to wait until April of next year to revisit this turf. But so much has happened in the digital music space this year that I just couldn’t wait. And there will probably be a whole new set of changes to look at by next April anyway.
The biggest news of the year, as far as I’m concerned, was the shutdown of Lala.com. Apple bought Lala the company in December 2009 and shut down Lala the service a little over seven months ago. That wasn’t a surprise. After the purchase, all development of the Lala service had been suspended, its key Music Mover feature was disabled, and the service was closed to new members. The official shutdown was a mercy killing.
Lala’s business model was genuinely disruptive, with purchase discounts of about 20% compared to iTunes, the ability for music lovers to purchase streaming rights to an album for 10 cents a track, and a digital locker where you could upload your own digital music files that you could listen to anywhere. And now it’s gone.
Apple is obviously planning a cloud connection to iTunes, and I am confident its business model won’t be anything like Lala’s. (I’ll speculate more about what a cloud-connected iTunes store might look like when I discuss the current crop of subscription services.)
With Lala out of the picture, innovation in the digital music space has ground to a halt, and discounts have shrunk. So what does the market look like now?
For more than a month, I’ve been looking closely at all of the mainstream digital music services available in the United States: the iTunes Store and a handful of online alternatives that sell tracks and albums in digital format. I also compared the prices of digital albums with the prices of the same CD as sold at Amazon.com.
Besides iTunes, I looked at five services in depth: Amazon MP3, Microsoft’s Zune Marketplace, Rhapsody, Napster, and eMusic. I also gathered data from 7digital, but its selection had enough holes in it that I couldn’t include it in my overall results. (A note of apology upfront to my international readers. This roundup includes only U.S.-based services and is based on prices in the U.S. market. These conclusions aren’t relevant if you live outside the U.S.)
Amazon MP3 and eMusic are the only two pure retailers in the bunch, with no subscription options and lots of deals available.
Rhapsody and Napster (the latter owned by Best Buy) are based primarily on a subscription model, which gives you the right to listen to any track in the collection on a PC and (with the right plan) to download copies for offline listening on an Android device or an iPhone. On the sales side, neither service even tries to compete with Apple, offering prices that are typically within a few pennies of the iTunes price.
The Zune Marketplace is also a subscription service, part of Microsoft’s “three screens and a cloud” strategy. Its big differentiator is the Zune Pass, which allows subscribers to play any song or album from its collection using a PC, an Xbox 360, or a Windows Phone 7 or Zune HD device. Although you can buy albums from the Zune marketplace, you might end up paying more than you would with iTunes.
I’ll have a more detailed look at all three of these subscription services later this week, along with some predictions on how Apple is likely to try to compete with them in a future iteration of iTunes. Today’s post is exclusively about the economics of buying songs and albums online.
Selection isn’t as big an issue as it was a year or two ago. All of the major digital music services are likely to have more than enough music to keep you happy. Ironically, iTunes was less than perfect on this score compared to its major rivals.
If you buy two albums a month, the chart at the top of this page will tell you, on average, how much you’ll spend at each service. But averages can be deceiving, as I explain with a closer look at the details.
Page 2: How much does a digital album really cost?
Page 3: How the other services stack up
Page 4: My methodology (and the list of albums I used)
Page 2: How much does a digital album really cost? –>
Previous installments in this series:
April 2009: 6 music services compared: Who can bust the iTunes monopoly?
April 2010: Alternatives to iTunes: how 5 rival music services match up
