Time Magazine Looks At iTunes Music Store, Piracy, Industry

by , 4:15 PM EDT, September 19th, 2003

Time Magazine has published an in-depth look at piracy, the music industry, and the iTunes Music Store (iTMS). The article includes an image of an iPod that has a pair of handcuffs plugged into the headphone jack, and looks at how the RIAA's legal assault on pirates may help services like the iTMS. The article looks at how the industry has been playing catch-up to the iTMS, and the many mistakes made in legal downloads before Apple launched its service in April of this year. From the article:

No one needs the new sales outlets more than the recording industry does. Sales for the industry fell 14% from their 1999 peak, to US$11.6 billion in 2002, as consumers who were turned off by hefty CD prices and lame products embraced the digital black market instead. Forrester Research estimates that the migration costs the business at least US$700 million in lost CD sales annually. Worse, record labels tripped up the progress toward a legal Internet music market by quibbling over rights and hoarding their artists. They spent hundreds of millions on their own online services, alienating consumers by forcing them to seek out artists by label. Luring back those disgruntled music lovers from file sharing is difficult but vital, says Doug Morris, chairman of Universal Music Group, which slashed CD prices this month. "If you had Coke coming out of the kitchen faucet," he says, "what would you pay for a bottle?"

A dollar, wagers Steve Jobs, CEO of Apple -- or 99¢, to be exact. When Apple introduced its pay-per-song service last spring, many doubted the computer maker could succeed where so many had failed. But the straightforward concept and uncomplicated design of iTunes immediately hit a chord with consumers, who downloaded 1 million songs in its debut week. The service's popularity underscored Jobs' argument: free file sharing can be a pain in the neck. Once you square yourself with breaking the law, there's also the virus-ridden software, the porn links, the cumbersome downloads. "We're all about competing with piracy," says Jobs. The record industry gets it. "If the business could have done one thing differently over the past few years," laments Andrew Lack, CEO of Sony Music Entertainment, "it would have been to find a smoother, faster path to iTunes and the other services."

There's a lot more in the full 2-page article at Time's Web site. Thanks to Observer T.H. for the heads up on the article. We recommend it as a good read.

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Time Magazine Article