2003: The iTunes Music Store (in spite of the annoying commercials) has been selling a steady stream of songs since its inception. Breathless accounts of downloads passing the 1 million and then 2 million mark make it clear that Apple has made some good progress in making downloadable music a viable business.*
There’s no doubt that the iTunes Music Store was something of a risk for both the record labels and Apple. The record labels have been trying to stamp out online file sharing for years and have had little success with other forms of online music distribution. Apple is the test case for what will likely be a successful venture. Because it’s a pioneer, Apple will also be the one to make the mistakes and take the criticism (as well as the praise).
The store’s success indicates that the gamble by both Apple and the music industry has paid off.
But where is the point of no return?
The service is still young, and there are many things that could go wrong. For example, what would happen if someone managed to reliably circumvent the digital rights management system Apple has in place? Would the music labels pull the plug?
At this point, it would take one whopper of a mistake for the system to be pulled, even temporarily. While the first weeks may have been somewhat tense, the press has been good, the system seems to work, and people generally seem to be happy.
If you consider the user base that Apple is working with, 3 million songs is nothing to sneeze at. The Mac has around 3% of the desktop market. Do the math to see what 3 million songs could translate to on the Windows side of the fence. Not chicken feed.**
The iTunes Music Store has also started something new in the online music industry. This new system delivers what people and the record labels want and need. By being the first to deliver this service, Apple has successfully grafted itself to the record companies. To whom will they turn for their future online music needs? Apple, most likely. After all, you dance with the one who brought you.
Apple has quickly proven that a superior music service can make money. The music industry has taken notice and will likely be able to stomach a little more risk.
With Apple’s success in the first few weeks, they have reached the point of no return. Pulling the plug would do too much damage to the music labels and Apple. Apple and its Music Store success is one of the safest bets around.
* Editor’s note: Yesterday Apple mentioned they have sold over 3 million songs through the iTunes Music Store.
** The iTunes Store wasn’t available to Windows users until October 2003.