Apple’s iTunes continues to be the largest music retailer in the United States. But when you’re on top, everyone wants to take you down — this is especially true in the cutthroat world of the music industry. ITunes finds itself under attack from all sides. Amazon.com’s MP3 store is beginning to gain ground and market share, though it continues to lag way behind iTunes overall in music downloads. Amazon’s big advantage is that they sell only “unprotected” MP3s, which used no digital rights management technology.
Amazon also encodes their MP3s at 320 kB per second, and these larger files provide the highest sound quality available from the MP3 format. But Amazon is not the only big name out there hungry for a slice of Apple’s pie: Rhapsody has just announced they will begin selling unprotected MP3’s through their music subscription service. Single tracks will be priced at $.99, and full albums at $9.99.
To jumpstart Rhapsody’s new no-DRM policy, the company is giving away a free album to new users who sign up for a Rhapsody account before July 4. The promotion is designed to draw attention to Rhapsody’s large and growing library of tunes. Additionally, Rhapsody is offering full track previews before purchasing. This gives them a great advantage over Amazon, which offers only 30 seconds previews of full tracks.
Amazon, however, does continue to have a price advantage, offering many tracks for $.89 cents and some full albums for $8.99. Amazon also offers daily deals, which can save users as much as 50% on a wide variety of music.
But with Rhapsody and Amazon offering unprotected MP3 downloads, the pressure is mounting on Apple to remove the digital rights management from their tracks and sell regular MP3s, which can be used on a wide variety of portable devices. Up until now, Apple’s iTunes has used a proprietary music format which is not compatible with many competing MP3 players.
While this “protectionist” policy has helped make iTunes successful, if Apple is not careful how they proceed forward, it could also be their undoing. With big industry players like Amazon and Rhapsody offering standard DRM-free MP3s (often at cheaper prices), experts predict iTunes will have to struggle to remain on top.
Of course, Apple could make things a lot easier for iTunes, simply by switching over to standard MP3s, and ditching the digital rights management cripple-ware. So far Apple has been reluctant to do this, but things can change quickly in the world of digital media
Whether they like it or not, iTunes will eventually need to change their policy. Because even if they can hold on to the title of number-one music retailer in the US, they’re still going to be hemorrhaging market share (and money) to Amazon and Rhapsody as long as they continue to use DRM protected music files.
