Why I don’t get iTunes
My family seem to have a lot of iPods – going right back to the first generation. Having lived with cassette walkmans (you had to carry a bunch of tapes in your backpack, CD walkmans (didn’t exactly fit in your pocket) and early MP3 players (wasn’t a lot you could fit on a 32mb Rio) – the iPod (originally 5GB) was a godsend. Everything about the original iPod was cool – and you could carry around a pretty large music collection and listen to whatever you liked. I tried other music players over the years – Cowan, Archos, Sansa, but the iPod was always the best. Once album art was displayed – bingo! I never quite saw the point of the shuffle.
Back in the late 1990s I digitalized my CD collection (and indeed some cassettes) to MP3 – so I was an early adopter. When the iTunes store opened (followed by lots of similar WMA stores), I didn’t quite get it: the music was limited by Digital Rights Management. Why would you want to buy a product that you clearly did not own: if I buy a CD or vinyl record – I can sell it to a second hand shop. Soon after emusic.com opened – selling VBR encoded MP3s at good prices, and they allowed you to re-download if you lost your files due to negligence, hard drive failure or accidental deletion. [unfortunately they subsequently increased prices and got rid of re-downloads so I gave up on them]. Along came Rhapsody – which allowed you to stream anything you liked to your computer – they subsequently allowed you to rent music to an portable audio device (usually some WMA certified gadget) and this opened up another paradigm. So, after a decade of digital music stores – where do I stand?
These days I never ever buy compressed music. I do buy music from HDTracks (24/44-88-96) – but that is the only real current source of high resolution. I have never made a purchase from iTunes. Ok, I have bought lots of CDs/DVDA/SACD and Vinyl over the last decade, but I can’t help feeling that nowadays iTunes is for suckers. Now that Deezer, Spotify, Rhapsody and others allow you to download unlimited amounts of “rented” music to your iPod, iPhone, iPad, android device or computer – and you can stream – really everywhere in reasonable resolution – what is the point of iTunes? Modern pop music is disposable – what you buy today you are likely to grow out of next year. If you are so attached to an album that you cannot live without it, surely a physical CD is better value than an iTunes download. I have not listened to music radio for years, because where I live commercial radio is crap pop music and moron DJs. But Pandora – this is the future: tailored radio for your mood and taste. Online and cloud computing is clearly the future – with little or not local content. Just as cars were slow to obtain tape and CD players, and mp3 playing capabilities (and satellite radio is very limited), soon all cars will have broadband, and a Pandora like service is the way to go. A siri like voice activated interface that you could instruct: “play me music like Steely Dan” or “80s Chicago house music”.
I have a suspicion that the retail wars are just starting: yes HMV and all the record shops have been killed off by iTunes; yes Borders was butchered by the Kindle – but really, these are just 21st century versions of 19th Century retail. Who really wants to own non physical products? Aside from reference books, I find the whole Kindle thing a bit strange. When you look at your “cloud” and see all of these crappy books that you or your family once downloaded but have no interest in ever reading again you have to think of DVD box sets. Once you have seen a series of 24 – you will never watch it again – you would have been better off renting the series than having to store the box in your home (or fob it off on a relative). Novels, movies and TV series are temporary entertainment diversions – that is why we go to the movies, watch TV or go to the library: owning a product (unless you really love it) is only necessary if you cannot borrow it. The only issue is pricing: how much is a book worth if it is only going to be read once? Or a movie? Or a tv box set? Clearly Netflix are on to something with their business model (although I don’t know how profitable it is). It is a great way for tv companies and movie studios to milk the back catalogue – and make no mistake – BOX sets – that great DVD boon of the noughties is a dying business. Just like audiobooks on 12 tapes or CDs are pointless when you can download the book into your iPhone from audible, similarly the on demand model of Netflix is a real winner.
If I owned Apple stock, I would sell it immediately. I am concerned about their business model:
1. For all of the reasons I have listed above, if iTunes does not introduce streaming and renting, that business will die rapidly.
2. Their products:
a) I had the opportunity of buying an iPad Mini this year. I obtained a Nexus 7 instead – it was half the price, plays flash websites and has a file manager. If I lose it – I am not throwing away a week’s wages.
b) They need to integrate the mac with the iPad – the MacBook air’s screen should detach and act as a tablet. Apple had a 5 year operating system lead on Microsoft when Windows 95 came out and destroyed Apple’s market share. Apple had a similar lead over Windows Vista and had an excellent tablet. Now Win 8 laptops with detachable screens are appearing all over the place. Make no mistake – people are pissed off with the closed Apple system and lots and lots of folks want a fully functional laptop (where they have complete control over programs and content) and a tablet in one product. The Asus transformer was a nice product, but once Win 8 gets it’s act together (am not sure about the RT version), it is going to dominate the market. Very soon people will be thinking “my laptop does everything a tablet does (and more), why would I need to spend $700 on a new iPad. The 10″ iPad is DEAD and the 7.8” device is pricing itself out of the market. Once the coolness factor goes (and the iPad really isn’t cool anymore – my 78 year old dad has one), premium pricing will have to follow.
c) Despite all the Apple hype – Android is the market leading smartphone operating system. Moreover, since the Galaxy S3 – nobody thinks the iPhone is cool anymore. It now comes across as a “sensible” rather than chic option, and aside from the Apple cult, unless there is rapid product development in the next 18 months, Apple will become the new Nokia or Motorola.
3) The Business: I have an iPhone and iPad because I bought an iPod touch – I was familiar with the interface. Kids growing up with android smartphones will stay OS loyal and that market dominance will be reflected in a drop-off in iPhone sales and with it Apples profit drivers. As profits fall, and they will, stock value will fall (as it is overpriced) investors will clamour for a change in management, new products will be rushed out – but now with the elegance of the Jobs era, and it will be 1997 all over again. We have yet to see an innovative product since Jobs’ death. One has to wonder…..
So what should Apple do?
1. Stop the premium product obsession – the Nano is inexpensive and great. Bring out an inexpensive iPhone and challenge android for the lower end of the market. Just give in on the flash issue.
2. Turn the next MacBook air into a combined PC and tablet and drop the 10 inch iPad.
3. Cut the price of the Mini by 25% and stop ripping us off on memory upgrades.
4. Come up with an iTunes version of Pandora (or just buy the company), and bring in streaming and renting (they already do limited time renting for movies).
5. Beware of hubris – Borders, Circuit City, Virgin, Nice Price, Sam Goody, HMV etc. all big name entertainment retailers that are no more. Sooner or later that music industry will come up with a quality alternative to iTunes – it takes only 1 genius to change a paradigm (who would of thought of Facebook 10 years ago).
6. Get with the programme – we need 24 bit audio support, uncompressed downloads and the ability to play back Flac files from iTunes. (admittedly, these are personal requests).
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