“YouTube’s plan to provide ‘every’ music video free is a ‘nail in the coffin’ of the paid-for online content business model and potentially threatens the dominant position of Apple’s iTunes, according to City analysts,” Mark Sweney reports for The Guardian.
“The video filesharing website, where 100m clips are watched every day, is in talks with Warner Music and EMI to offer music video downloads for free. Revenue will be provided by advertising,” Sweney reports.
“‘Any service that YouTube puts in place is, almost beyond reasonable doubt, not going to be iPod compatible,’ said Mark Mulligan, vice-president at JupiterResearch. ‘If they develop portability – and that should definitely be on the table – then Apple could be in the unusual space of playing catch up,’ he added. ‘If YouTube can convert its massive online popularity then it could provide a significant reason for people to buy non-iPod devices, at the moment Apple is still the best bet for portable music watching. Either way it is a nail in the coffin of paid-for services as the dominant online model versus ad-funded alternatives,'” Sweney reports.
Full article here.
What percentage of iTunes video sales are music videos anyway? We’d venture a guess that TV shows make up the bulk of Apple’s paid-for video content business, not music videos. JupiterResearch’s Mulligan vastly overestimates the power of YouTube and their music video plans. People have invested in the iPod ecosystem, they’re not going to dump it all just because YouTube offers iPod-incompatible music videos with ads.
NPD: Apple retains huge lead with 75.6% share of U.S. music player market – August 17, 2006