Universal, iTunes, and The Problem with Consumers
Universal Music is reconsidering its deal with iTunes and has decided to remain “at will” rather than resign to a longer term deal. Also, apparently that ninety-nine cents per song thing rankles. You know how that goes.
Various news outlets have reported on this issue, and if it’s a matter of keeping options open, I have to agree that Universal is doing the right thing. I mean, at some point, their deal with SpiralFrog might be lucrative, and there are no guarantees about which service the kids might be using a year from now. It’s better to remain flexible in today’s business environment.
On the other hand, Universal is the company that swore it would, somehow, repackage the CD to combat declining sales. And the music industry, in general, hasn’t been brilliant about making the right choices. If it turns out that this is all about the money — meaning Universal wants more — then some executive shake-up is likely warranted. Like it or not, the music companies need to realize that a huge aspect of Apple’s success with iTunes is the fact that songs are being offered at the right price for consumers (they, you will recall, are the ones who actually pay money for product).
Right now, at this moment, the iPod dominates the player market. Nobody else comes close. A year from now, another player might emerge to challenge the iPod’s dominance. Competition is a good thing and there are plenty of ears to share with everyone. But until iTunes becomes a marginal player in the game, it remains the most important weapon that major labels have in their fight against piracy: the go-to place to legally buy music.
In fact, iTunes has proven that people will pay for music if it is available at a reasonable, reasonably easy to access, and useable on multiple platforms.
Universal does itself a service to keep its options open. But it should recall that wanting the customer to behave in a certain way does not guarantee that behavior. Right now, the consumers are driving — no matter how much the music industry wants them to cede control back to those who know better, music fans are making their own choices.
And it’s almost a guarantee that the people aren’t going to do what the music industry wants.
RSS
1 Comment(s) so far
1. AllOfMP3: The RIAA Wins the Battle, but Loses the War | Medialoper wrote on July 5th, 2007 at 11:12 am
[...] another coincidence of timing, we’ve been hearing quite a bit about Universal Music Group’s efforts to play hardball with Apple. Universal is apparently refusing to resign a long term agreement to make its catalog of music [...]