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October 10, 2011

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When Apple rolled out iTunes for the masses in the spring of 2003, the music industry was at a point of transition - and chaos.

Entering the new millennium, albums were enjoying blockbuster sales of several million units for its superstar artists, and profits were booming. Yet the threat of Napster and other forms of illegal downloading threatened to eviscerate those profits as many music fans were starting to get used to the idea that music, and loads of it, could be free.

Apple's iTunes entered into that landscape with a concept that wasn't exactly new: a system where you could pay for songs online. Yet iTunes, with its simple interface, its simple concept - 99 cents per song - and revolutionary MP3 device, the iPod, made it the golden standard.

The entry of Apple and its leader, Steve Jobs, who died Wednesday, into the music world was more than a success - it was a phenomenon. Today, iTunes is the largest music retailer, has redefined the listening experience and has largely become the way that music is consumed.

What's less clear is how much the music industry - which is continuing to decline - has benefited. Even today, consensus is mixed.

"It really did remind an entire industry, and gave a cue to even a culture beyond the industry that if you provided music in a convenient, direct way and responded to the consumers' interest and demands, they would in fact buy it, especially if it was priced appropriately," said James Diener, CEO and President of A&M/Octone Records.

"It forced change in a positive way. People who are critical of what iTunes may have done perhaps have short memories and don't realize that the alternative at the time was that an enormous amount of music was leaking onto the Internet and being consumed for free," Diener added. "The alternative was to inspire people to buy music, and to go to a digital retail site. ... That was a remarkable step forward."

Apple introduced iTunes in 2001, a few months before it would release the now-ubiquitous iPod (which begat the iPod Nano, the iPhone, the iPad). At the time, it was not a music store but a rip-and-burn library service only available for Mac users. It initially was viewed with great skepticism by record companies for its ability to make digital copies of music - something the industry thought would lead to piracy.

The industry had a lot to protect. It was enjoying booming sales at the turn of the last century, fueled by the success of teen sensations like Britney Spears, the Backstreet Boys and 'N Sync. But it was just starting to feel the effects of the illegal downloading era: The top-selling album of that year, Linkin Park's "Hybrid Theory," sold 4.8 million, down from 2000's top-seller, 'N Sync's "No Strings Attached," which sold almost 8 million a year before.

"That was at the same time we were confronting Napster, we were confronting the beginnings of the global piracy epidemic that was to come," said Jim Donio, president of the National Association of Recording Merchandisers, or NARM.

"At the same moment of time, we were also experiencing the biggest weekly sales of all time. It was a very odd confluence of events, because you had the harbinger of immense challenges, but at the same time, reaping the rewards of incredible record breaking physical sales. ... It was heated, it was tense."

When Apple's iTunes became a full-service online music store in 2003, it offered more than 200,000 songs that could be loaded on your iPod and fully portable, all for 99 cents a download, no matter who the artist was (in recent years, it has allowed for more variation, with some singles now costing $1.29 per song).

Bill Werde, editorial director at Billboard, said that while other services were available at the time, the genius of Jobs was making iTunes the ultimate consumer destination.

"He created the retail experience that most people know now. He focused on the fan, he focused on the user experience, he didn't focus on rights and complicated pricing schemes. He focused just on what would be simple and what would be easy for a music fan to do, and what would be good for a music fan to experience," Werde said.

"You look around today, we sell tens of millions of digital tracks each year," he continued. "Given that Apple has an 80 percent, 70 percent market share in that digital space when it comes to downloads, you really see how important Apple has become in selling music to music fans."

Apple set the pricing, to the chagrin of the music industry, promoting parity for singles and albums.

"If you walked into a physical record store prior to iTunes ... there was more confusion about what the value of what certain records were worth. You'd see one record that was a brand new release marked at $17.98, and then another one right next to it for $13.98, so there was a lot of clarity for iTunes," Diener said. "I think what iTunes did, which was wise on their part and difficult necessarily for the industry to appreciate at first, was they just standardized all the pricing. ... That was growing pains for the industry because they were used to having more control of the pricing of their products."

Diener believes that price standardization was one of the key reasons for iTunes' success. But while iTunes was booming, the era also hastened the demise of traditional retail stores like Tower and Virgin. No longer did rabid fans need to form a line in front of a music store to get their favorite album, then play it once they got home; They could order it at home and listen instantaneously.

They also didn't have the buy the whole album: iTunes ushered in the era of the singles artists. Cherry-picking songs from albums has become the norm, and some artists have complained that iTunes led to the diminishment of the album.

"I don't disagree with some of that criticism," Diener said. "By unbundling the album and allowing consumers to buy songs one at a time, it changed the whole nature of consumer thinking of what is the basic unit of music - is it an album or is it a single?"

But Werde says Napster and other forms of illegal downloading already had started that process in motion.

"I don't think that iTunes unbundled the album, but I think Apple sort of benefited from this eco-system that certainly supported the single," he said. "Really, it's the music fan that unbundled the album, by all of these fans clearly responding to this amazing new way to experience their music. I mean, the shuffle button? I think the shuffle button may have single-handedly changed the musical horizon of 50 percent of the world."

In 2010, iTunes marked the sale of its 10 billionth song. Even longtime stalwarts have come to embrace iTunes: The Beatles' catalog finally became available late last year. Paul McCartney considered Jobs a friend and called him "a great creative artist" and a music lover.

Yet for all of iTunes' success, the music industry is still floundering. While sales are up slightly this year, the industry has been on a dramatic decline for the past decade, as labels have been shuttered and thousands of jobs lost as it continues to contract. While digital downloads continue to explode, overall album sales have dropped by at least half.

"Steve Jobs leaves behind a little bit of a complex legacy," Werde said.

"He helped create what we think of today as the legal digital music market, which is a substantial music market around the world. But at the same time, the music business in the retail space is probably worth about half of what it was worth ten years ago, so I don't know that anyone saved the music business," he said. "No one has yet solved the problem that music can still be free."

I think it was a great idea. I have found dozens of new artists by accident due to just browsing for independednt funk / dance / soul musicians. Lets not forget the hundreds of radio stations connected to itunes itself.

iTunes does have a great interface and I love using it to search for and discover music. Though, I'll only buy from iTunes if I can't find what I'm looking for anywhere else. I'll usually search on itunes and then buy downloads (and in some cases the actual album) from Amazon.

Is iTunes great for the music biz? It's such a broad question. It is probably good for some key players and not so good for a lot of other players. But, I guess that was always the case with the industry. And, contrary to what the article implies, itunes didn't save the industory from illegal downloading and duplication. It's still rampant, which is why, despite itunes, the industry contintues to decline.

it's certainly bad for audio quality...

In some of the memoriams to Steven Paul Jobs many have stated, Apple iTunes didn hurt the music biz, Apple iTunes saved music industry, I agree with this point of view. If the music industry doesn't come up with an idea or an invention related to selling their product they always think they're being ripped off. Not so...

All Apple did was bring back the damn single... it in this case whatever single you wish to purchase. I will argue still, if the album is good people will purchase the entire ablum. If an album has two or three good songs and remaining 8 or 7 songs aren't shit, people won't buy it.

Power to the consumer.

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[Edited 10/11/11 10:05am]

TD3 said:

In some of the memoriams to Steven Paul Jobs many have stated, Apple iTunes didn hurt the music biz, Apple iTunes saved music industry, I agree with this point of view. If the music industry doesn't come up with an idea or an invention related to selling their product they always think they're being ripped off. Not so...

All Apple did was bring back the damn single... it this case whatever single you wished to purchase. I still will argue if the album is good, people will purchase the entire ablum. If an album has two or three good songs and remaining 8 or 7 songs aren't shit, people won't buy it.

Power to the consumer.

but now it seems that because of that, more people are more concerned with trying to make an album full of hit singles as opposed to just having a good cohesive album. to some, i suppose thats just good business but it sure bugs the hell out of me. lol.

I remember feeling taken when I'd buy an album and the best song on it was the one I heard on the radio. iTunes allowing people to buy songs as they choose is good because now artists and labels know that if you want to make money, you've got to put out an album people will want in its entirety.

That's a naive point of view, I'm afraid. People tend to expect albums to be close to the 80 minute mark these days, i.e. the old double album format. It's impossible for an album not to have filler in that case. Having tracks available individually has killed album sales and there's no way back from that. Singles are still loss leaders.

iTunes is cool for finding older stuff that you can't track down and even for getting newer material but I still purchase physical CDs for the artists I really love. I enjoy having a record/CD collection besides a 1TB harddrive looks silly on the bookshelf.

They figured out a way to continue to SELL music, even to computer saavy kids who could just as easily steal it. So that's good for the music biz, I think

Mdizzles said:

TD3 said:

In some of the memoriams to Steven Paul Jobs many have stated, Apple iTunes didn hurt the music biz, Apple iTunes saved music industry, I agree with this point of view. If the music industry doesn't come up with an idea or an invention related to selling their product they always think they're being ripped off. Not so...

All Apple did was bring back the damn single... it in this case its whatever single you wish to purchase. I'll argue, if an album is good, people will purchase the entire ablum. If an album has two or three good songs and remaining 8 or 7 songs aren't shit, people won't buy it.

Power to the consumer.

but now it seems that because of that, more people are more concerned with trying to make an album full of hit singles as opposed to just having a good cohesive album. to some, i suppose thats just good business but it sure bugs the hell out of me. lol.

But who's fault is that? Is that Apple's/late Steve Job's fault or is it the fault of artist and their respective record companies for choosing to be shortsided? It appears they've chosen to sale their souls to devil. Nobody is stopping any arist from making cohesive album. Though, I'm not sure many of these artist are up for the challenge, possess the musicianship, or have the talent to do so. Marketing vs Substance.

Michael Jakson's, "Off The Wall" album consisted of 10 songs, 42 mintues and a couple of seconds long. I don't recall anyone saying anything to the effect, damn that was a short album! People tend to count the minutes if an album that sucks.

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[Edited 10/11/11 16:44pm]

[Edited 10/11/11 21:08pm]

TD3 said:

Mdizzles said:

but now it seems that because of that, more people are more concerned with trying to make an album full of hit singles as opposed to just having a good cohesive album. to some, i suppose thats just good business but it sure bugs the hell out of me. lol.

But who's fault is that? Is that Apple's/late Steve Job's fault or is it the fault of artist and their respective record companies for choosing to be shortsided? It appears they've chosen to sale their souls to devil. Nobody is stopping any arist from making cohesive album. Though, I'm not sure many of these artist are up for the challenge, possess the musicianship, or have the talent to do so. Marketing vs Substance.

Michael Jakson's, "Off The Wall" album consisted of 10 songs, 42 mintues and a couple of seconds long. I don't recall anyone saying anything to the effect, damn that was short album! People tend to count the minutes if an album sucks.

----------------------------------------

[Edited 10/11/11 16:44pm]

SO TRUE! I did music retail for a long time and dealt with labels and buyers and consumers and honestly they all kind of need help. The entire 90's and early 2000's was filled with FILLER, the CD brought and made filler, downloading didnt kill music, the CD and the idea that you are owed something KILLED it. Im sorry but i dont side with the whole knowledge of listening to 30seconds of a song and then deciding, and i also dont see the need for every song to be a single and available for purchase. I mean when you go to a movie can you watch half then pay? or just pay half the price of a movie and only watch the last half? Can u buy a book take it home read it and then bring it back because you subjectively didnt like it? Forms of art and creativity are subjective, album prices are relative to what they were for their time. I hear people talk about cds should be $5 what the hell albums were $5, i remember paying 6.99 for purple rain on vinyl i think maybe more, and paying 12.99 for the 1999 album on vinyl, and lets be real, what in this world still costs what it did 3 decades ago? are u still paying 25 cents to get on the bus or train? Why is music the one thing that should be exempt? thats all im saying. WE have gotten used to shit being free so we feel we have a right to a good album? Really who the hell do we think we are? i mean if you are that worried about the album sucking, dont buy it! If i think a movie might suck, shit i aint going, im not going to pay and then cry about it, if i go and dont like it, shit tomorrow is another day.

Now as far as APPLE goes, it was just another business set up when all the other alternatives were gone, it didnt help retail, but then again, neither did consumers, and NEITHER did the labels who drove retail out of business first and foremost. Artist perspective, Itunes has its ups and downs, if you are indie it has its benefits, if you arent, its another hand in your pocket.

TD3 said:

Mdizzles said:

but now it seems that because of that, more people are more concerned with trying to make an album full of hit singles as opposed to just having a good cohesive album. to some, i suppose thats just good business but it sure bugs the hell out of me. lol.

But who's fault is that? Is that Apple's/late Steve Job's fault or is it the fault of artist and their respective record companies for choosing to be shortsided? It appears they've chosen to sale their souls to devil. Nobody is stopping any arist from making cohesive album. Though, I'm not sure many of these artist are up for the challenge, possess the musicianship, or have the talent to do so. Marketing vs Substance.

Michael Jakson's, "Off The Wall" album consisted of 10 songs, 42 mintues and a couple of seconds long. I don't recall anyone saying anything to the effect, damn that was a short album! People tend to count the minutes if an album that sucks.

----------------------------------------

[Edited 10/11/11 16:44pm]

[Edited 10/11/11 21:08pm]

even as a huge apple hater but i don't blame them for lack of cohesion and singles focus... i blame MJ and Quincy Jones. (i've got my riot armor on. lol.) although i do think itunes and others in the same format were a huge platform and pushing that singles focus into the modern age.

my other thought is lack of cohesion is somewhat due to music fans having a shorter attention span.

[Edited 10/11/11 23:52pm]

[Edited 10/12/11 0:05am]

[Edited 10/12/11 0:05am]

lastdecember said:

TD3 said:

But who's fault is that? Is that Apple's/late Steve Job's fault or is it the fault of artist and their respective record companies for choosing to be shortsided? It appears they've chosen to sale their souls to devil. Nobody is stopping any arist from making cohesive album. Though, I'm not sure many of these artist are up for the challenge, possess the musicianship, or have the talent to do so. Marketing vs Substance.

Michael Jakson's, "Off The Wall" album consisted of 10 songs, 42 mintues and a couple of seconds long. I don't recall anyone saying anything to the effect, damn that was short album! People tend to count the minutes if an album sucks.

----------------------------------------

[Edited 10/11/11 16:44pm]

SO TRUE! I did music retail for a long time and dealt with labels and buyers and consumers and honestly they all kind of need help. The entire 90's and early 2000's was filled with FILLER, the CD brought and made filler, downloading didnt kill music, the CD and the idea that you are owed something KILLED it. Im sorry but i dont side with the whole knowledge of listening to 30seconds of a song and then deciding, and i also dont see the need for every song to be a single and available for purchase. I mean when you go to a movie can you watch half then pay? or just pay half the price of a movie and only watch the last half? Can u buy a book take it home read it and then bring it back because you subjectively didnt like it? Forms of art and creativity are subjective, album prices are relative to what they were for their time. I hear people talk about cds should be $5 what the hell albums were $5, i remember paying 6.99 for purple rain on vinyl i think maybe more, and paying 12.99 for the 1999 album on vinyl, and lets be real, what in this world still costs what it did 3 decades ago? are u still paying 25 cents to get on the bus or train? Why is music the one thing that should be exempt? thats all im saying. WE have gotten used to shit being free so we feel we have a right to a good album? Really who the hell do we think we are? i mean if you are that worried about the album sucking, dont buy it! If i think a movie might suck, shit i aint going, im not going to pay and then cry about it, if i go and dont like it, shit tomorrow is another day.

Now as far as APPLE goes, it was just another business set up when all the other alternatives were gone, it didnt help retail, but then again, neither did consumers, and NEITHER did the labels who drove retail out of business first and foremost. Artist perspective, Itunes has its ups and downs, if you are indie it has its benefits, if you arent, its another hand in your pocket.

I agree. People who complain about the price of music could actually complain about the price of everything with more reason, since the price of albums hasn't actually increased, but the price of most other goods has. But most people don't do it. Music isn't worthy, it should be free, that's what they actually imply.

On the contrary, as a music lover, I don't mind paying for music. I usually find clothes, restaurants, etc. expensive, but not music.

People who use the "high" price of music as an excuse to acquire it illegally are the same pricks who think nothing of spending around £3 on a shitty Starbucks coffee.