Sunday, November 8, 2009

iTunes – Gateway to a media empire

In 2001, Apple launched iTunes, a simple music player. Today iTunes is the gateway to the largest music store in the world. This essay will examine this technology in detail.

Introduction

Founded in 1967 by Steve Jobs and Steve Wozniak, Apple Inc. is best known as an innovator in consumer electronics and software. Apple’s flagship product, the Macintosh was released in 1984 and featured a mouse and graphical user interface (GUI). Other successful products include the iPod and iPhone, first released in 2001 and 2007 respectively. An iPod is a digital media player and an iPhone is an internet enabled cell phone with iPod capabilities.

The subject of this essay will focus on a free software application called iTunes, developed by Apple to organize and play digital media. However the most important feature is its ability to manage content on an iPod and subsequently, the iPhone.

Features of iTunes

Since the initial release in 2001, iTunes has progressed significantly. In 2003, iTunes could be installed on windows based operating systems making it easier for iPod owners to synchronize music with their PCs. In 2005, iTunes added support for video content and the capability to stream content to other computers running iTunes on the same subnet.

But the capability that I would like to highlight is the introduction of the iTunes Store in 2003. The ITunes Store allowed users to purchase downloadable digital content. Initially only music was available, however this changed in 2005 when apple introduced video content. To protect the publisher’s copyright, iTunes used a propriety digital rights management software (or DRM) called FairPlay. Whilst this may have prevented piracy it also prevented the content from being played by other software application and devices. In 2007, to appease mostly European critics, Apple started to remove DRM from iTunes music. Apple defends this action by stating that DRM-free audio is available on traditional audio CDs.

iTunes Store Today

On the 4th of March 2008, iTunes Store replaced Walmart as the largest music vendor in the United States. As of March 2008, iTunes Store has sold more than five billion songs from a catalog that exceeds eight million songs. On Christmas Day in 2007, more than 20 million songs were downloaded.

The four major recording labels, Sony BMG, EMI, Universal and Warner, continue to sell music through iTunes Store however Universal, the largest music corporation, recently announced that it reserves its right to withdraw from iTunes Store if it disagrees with Apple’s pricing structure.

The music available on iTunes Store is currently a mixture of DRM and non-DRM content. However all content from EMI is DRM free as of April 2007.

Effectiveness of Technology

The combination of iTunes, iTunes Store and iPod prove to be an unbeatable combination, that is, the seamless integration of hardware, software and web services. It is likely that the sale of music (and other content) from iTunes Store is a large contributor to Apple’s 2007 revenue of 24 billion dollars.

Piracy is a cancer that has plagued the music industry for the past decade. This plague, in my opinion, is partially self-inflicted by the music industry’s stubborn refusal to adopt digital products in the 1990’s. Piracy is inevitable but may decline as digital media prices continue to drop.

Competition

Today there are many free media players and online music stores like Amazon MP3, Napster and Rhapsody, each with catalogs exceeding five million songs. Whilst they may encroach on iTunes market space they nonetheless indirectly promote iPod sales, as Menn and Quinn (2007) state,

A robust market for digital songs should translate in to more demand for the music players on which to play them, and Apple's iPod is the runaway leader.

The Next Generation

On the 29th of June 2007, Apple released the iPhone which is better known as the “Jesus Phone” (Economist 2007). The iPhone is essentially a cell phone with an integrated camera, iPod and web browser with Wi-Fi connectivity. Like the iPod, users can use iTunes and the iTunes Store to download, purchase and transfer music and video to their device.

However if the iPhone is connected to the internet using a Wi-Fi connection then it can use the built-in Safari web browser to purchase and download content directly from the iTunes Store website.

Less than a month ago on the 11th of July 2008, Apple launch the latest device, the iPhone 3G. The new iPhone includes an integrated GPS device but also the ability to download (and purchase) custom applications from iTunes Store.

This is an exciting development in mobile technology. iPhone 3G users can selectively modify the behavior of their mobile devices. For example, using an application called “AirMe”, users can take photographs that are automatically geotagged using the built-in GPS receiver and the uploaded to Flikr or the AirMe website.

Conclusion

The iTunes application started life as a vehicle to transfer music to the iPod. It has since morphed itself into a comprehensive media player and a gateway to the iTunes Store, the largest music store in the United States. ITunes and it’s online partner have transformed digital music from a forbidden commodity to a respectable multimillion dollar industry.

ITunes initially included proprietary DRM software to discourage privacy but this in fact became counterproductive as hacker found workarounds and Apple was accused of being anti-competitive.

ITunes has continued to provide value to its customer base by diversifying from music into other products like video and applications for the new iPhone.

References

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