Universal and Wal-Mart pile the pressure on iTunes

Universal and Wal-Mart pile the pressure on iTunes

Summary: With both Universal and Wal-Mart aggressively competing for customers in the music download game, will iTunes struggle to stay competitive in the face of stiff competition?

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TOPICS: Apple
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With both Universal and Wal-Mart aggressively competing for customers in the music download game, will iTunes struggle to stay competitive in the face of stiff competition?

While Universal's new Gbox service offers the usual DRM-encumbered tracks for 99 cents (what Gbox really has going for it is a special advertising deal with Google), Wal-Mart's new 94 cents a track DRM-free MP3 format means that it offers music in a platform-agnostic format and can cater for the iPod, iPhone, the Zune and almost every other portable media player on the market.

There's little doubt that DRM-free music is gaining momentum and outlets are becoming more aggressive when it comes to pricing.  This price of 99-cent a track that Wal-Mart is offering is a far better deal than the $1.29 that Apple wants for a DRM-free AAC-encoded iTunes Plus track.  This means that not only are Wal-Mart tracks better value, they are also easier to handle because they're not tied to a specific applications (such as iTunes).

I can't help but feel that Apple is being squeezed on both sides.  Not only is Apple now under pressure from the recording studios but it's also facing quite stiff competition from other outlets.  As it becomes easier for people dwelling cyberspace to buy music, iTunes' dominance will slowly be eroded.

Personally, I welcome easy access to DRM-free MP3 downloads.  I don't buy that many CDs a year nowadays (maybe 10 or so ... compared to around 30 - 50 DVDs a year) but I'm pretty sure that if there were enough outlets for MP3s that I might buy $10-20 a month worth of tracks, certainly over the first couple of years.  I don't think I'm alone in feeling like this.  There's a big market out there of people willing to spend a few cents here and there for the tracks they want to listen to.

Thoughts?

Topic: Apple

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16 comments
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  • 30 itunes purchases per ipod owner

    During that Wall St. Journal thing a few months ago (the one where Gates and jobs appeared together) Jobs said that the average number of songs bought by ipod owners was only 30.
    j.m.galvin
  • iTunes will still own the market.

    Sorry to break it to you, Adrian, but iTunes will still own the market. There's more
    iPods out there than any other portable music player, and most consumers would
    rather have "easy" than "non-drm-encoded" music (should they buy it off the internet
    versus buying CDs or using LimeWire/BitTorrent). And remember, if you decide you
    don't like DRM, you can always burn stuff to CD and then rip it.
    nix_hed
    • Quality

      Nothing you can by with DRM embedded today sounds any good. Their new DRM free are good enough quality to burn. iPod's in all incarnations still own the market, and the iTunes client is still the best (only?) option on Windows, but the iTunes store, Job's doesn't really care. He makes no money on sales, Apple is at break even. They make their money on hardware (and they make a lot of it).

      I'd bet that even without the store side, iPods, with there thousands upon thousands of accessories will remain the dominant player for many years to come.

      TripleII
      TripleII-21189418044173169409978279405827
  • That's a mighty big assumption you have there Adrian.

    You're assuming Apple wanted to sell the music to begin with.

    iTunes was never more than an adjunct to Apple's iPod efforts. Sure, it may have helped Apple a little in the profitability department, but iTunes simply is not where Apple makes their money.

    Or to put it another way, let's say you buy 30 tracks from iTunes to play on your iPod. Apple gets maybe .20 cents of each dollar or roughly $6.00, from which they must deduct their expenses. Alternatively, if there is no iTunes and you buy your 30 songs from Wal-Mart to play on your iPod, Apple sees none of that money, but has no expense.

    Either way, Apple made a bundle on the iPod.
    Letophoro
  • A welcome competition......

    but we've seen this play many times before. Company A steps out and announce they've teamed with company B for a NEW service (Real again?). New service gets a little attention, a little momentum until Apple release yet another lust-after product (New overdue iPods G6, New cheaper iPhones). Company A+B loses steam.

    The main reason Apple have such a dominant position is because of the iPod. If they continue to release lust-after iPods, iPhone and future devices that need iTunes, they will continue to dominate this space. And they are not running away from the DRM-Free bandwagon, but embracing it (Steve's letter)... http://www.apple.com/hotnews/thoughtsonmusic/

    Once Universal is done testing the waters, they will do a deal with iTunes for DRM-Free music; it would be insane to ignore the number 3 Music Retailer in the US. And lets face it, the average none-techie would rather load iTunes to fill their iPods and satisfy their none-DRM music crave than go to a WalMart site.
    dave95.
  • Walmart offers a better way.

    http://customcd.walmart.com/onehour/servlet/MainServlet

    I have used it 5 times now, 100 tunes of my choosing coming out to $1.12/song, I have the physical CD and also have them all ripped to Q8 ogg vorbis. It doesn't get much better than that. 4-5 days from purchase to delivery.

    I stumbled across this a few weeks back, and even those with iPods love it because they get the CD. (I should have asked WallyWorld for a referral fee).

    Even if Wmart opens up tunes to 256 WMA, I'll still go the CD route because 1, I don't want WMA and 2, having the CD always wins, especially at 10c more per song.

    TripleII
    TripleII-21189418044173169409978279405827
    • The only thing . . . .

      I'd like to see Wallyworld do is come up with a new way to download songs. They lock out anyone not using windows (unless you hav ea way around this in Linux, and if you have, leet me know how you did it!!! :) ).
      JLHenry
    • Sounds expensive

      I get 90 songs for $20 at emusic.com.

      Well, I think the price now is 70 songs for $20 for newbs,
      but still hard to beat.
      Kid Icarus-21097050858087920245213802267493
      • Dropped my emusic account

        Too many downloads that were "covers" and not the real bands.

        They don't seem to think there's a difference.
        mad tabby
    • Yeah, the Microsoft way

      Thanks. I'll pass.
      YinToYourYang-22527499
  • MP3 Doesn't Compete with AAC

    A 256 kbits AAC file is a lot better quality than a 256 kbits mp3. I suppose it comes
    down to what you think value is.

    To some it means the cheapest and who cares about quality. Those that bash Apple
    most likely fit into this category.
    CowLauncher
    • Or they realize they cant tell the difference...

      because of their hearing.
      mrlinux
  • Pile? Pressure?

    There's more of it where you're sitting than Walmart can create.
    YinToYourYang-22527499
  • Adrian's myth that you're not tied to a specific application with Walmart

    Walmart only ties you to Microsoft software, so much for openness.

    And AAC is not proprietary to iTunes. It's mpeg4, which is the successor to mpeg3.

    Why promote the inferior mpeg3? Because ZDNet and its bloggers are Microsoft shills. They'd rather feed you the lie that mpeg4 is proprietary and have you ignore the fact that Walmart is locking you into Microsoft's master plan.
    YinToYourYang-22527499
    • mpeg4 . . .

      isn't proprietary. iTunes version is. It has DRM up the wazoo, and can't be played on any player EXCEPT an iPod. That makes it proprietary. The same thing with DRM'd WMA's, too. AND DRM'd mp3s . . . etc, etc, etc.

      If it has DRM, it's proprietary.
      JLHenry
      • Wrong - DRM-Free AAC is not tied to iTunes

        The DRM-Free songs bought from iTunes will play on any other DAP that supports AAC, it not tied to iTunes+iPod. What you are talking about is their AAC DRM songs, which they will continue to sell for .99 together with the DRM-Free ones from EMI for $1.29

        [i]This means that not only are Wal-Mart tracks better value, they are also easier to handle because they?re not tied to a specific applications (such as iTunes).[/i]

        Better value yes, tied to iTunes no!
        SOCAM