Apple says iTunes is now the largest music retailer in the United States. Not the largest digital retailer. The largest, ahead of Wal-Mart, ahead of Best Buy, ahead of every shop with shelves.
Six months ago I wrote that the major labels had handed Amazon unprotected files specifically to weaken Apple, and that in doing so they had destroyed their own decade-long argument about copy protection. The tactic is now finished being tested and it is worth marking the result.
Amazon’s store is good. The files play anywhere, the prices are competitive, the interface is fine. It has taken share, and it will keep taking share, and it has not made a dent in the outcome the labels were trying to prevent. Apple did not merely hold its position through the arrival of a genuinely strong competitor with better terms. It passed the biggest physical retailer in the country while that competitor was launching.
The reason is the part the strategy never accounted for. Lock-in was never the main thing holding customers to iTunes. Convenience was.
The store is inside the application that manages the music that syncs to the device in your pocket. Buying takes one click and the file is where you need it before you have thought about it. Amazon’s store is a website, and buying from it means a download, and then getting the download into your library, and a small downloader application that exists to make that less annoying. Each of those steps is minor. Together they are the difference between a purchase you make on impulse and a purchase you decide to make.
Removing the copy protection removed a reason not to buy from Apple. It did not remove any of the reasons to buy from Apple.
So the labels gave away the thing they had spent ten years defending, took a public credibility loss on the piracy argument, strengthened a competitor who has not displaced the incumbent, and left the incumbent bigger than it was. I struggle to think of a recent industry manoeuvre that achieved less.
The other number worth sitting with is what being the largest music retailer in America now means. Songs, not albums. Individual tracks at ninety-nine cents, unbundled from the ten other songs that used to travel with them. The industry did not just change distributor. It changed the unit it sells, and the new unit is worth a fraction of the old one.
Nobody is going to reassemble the album by force. A format survives because people prefer it, and the evidence on preference came in some time ago.