iTunes LP: Much Ado About Nothing?

Six months after its introduction, the iTunes LP format, which offers music buyers expanded cover art, videos, lyrics, and other digital bonuses, is only available for 29 albums, a dozen of which were available at roll-out. “It’s something most people will look at once,” a disappointed industry source told GigaOM.

However, another source told writer Paul Bonanos that iTunes LP came out of Apple’s negotiations with the major record companies last year: in exchange for DRM-free music and flexible pricing, Apple was asked to use iTunes LP to spur purchases of complete albums again. While the iTunes Store was a boon to record companies that had watched Napster take some of their business, consumers’ renewed interest in buying single tracks wound up hurting the industry.

Mr. Bonanos said that Apple subsidized the creation of the initial dozen iTunes LP releases, which cost up to US$60,000 each. He wasn’t able to wrangle sales data out of Apple, which wasn’t surprising, but he said that music industry sources he spoke with said the impact of iTunes LP “has been tiny, if it’s had any effect at all.”

The iPad seems like it would be the perfect vehicle for taking advantage of the iTunes LP format, given the larger screen size, but Mr. Bonanos noted that Apple has done almost nothing to emphasize that possibility, with CEO Steve Jobs never mentioning the format during the launch event. “No one I spoke to said the imminent availability of the iPad had generated interest in new iTunes LP projects,” he wrote.

Instead, the music industry has taken an interest in the App Store, where consumers can find apps containing lyrics, videos, and other content. In addition, apps can serve as constantly-updated news channels, making them a more valuable way to interact with fans than a music format that is seen as a novelty.