Excerpts from Ipsos’ TEMPO Digital Music Brandscape study show that one year following its launch, Amazon.com Music has made a phenomenal first showing. Meanwhile, Rhapsody’s increased focus on advertising and partnership appears to be paying off. But neither development has slowed iTunes Store’s step, with the site continuing to gain dedicated users who perceive it as the best fee-based digital music destination.
The fifth annual TEMPO Digital Music Brandscape study is an in-depth examination of fee-based online music brands, and is part of TEMPO, an Ipsos quarterly study of digital music behaviors.
Awareness and use were steady among most dominant brands this year, but did increase for three top competitors while declining among many lesser-known players.
• iTunes continued to grow in terms of awareness, usage, familiarity, and ‘best brand’ mentions.
• Amazon had a strong first year, with initial awareness, usage, favorability and ‘best brand’ ratings comparable to any of the top brands after iTunes. Moreover, Amazon actually matched iTunes in user satisfaction.
• In perhaps the most significant development this year, however, Rhapsody gained in both aided and unaided awareness, usage and favorability. Although some of this growth may have been trickle-down from growth of digital music, overall, only iTunes and Rhapsody increased in these measures. This suggests that Rhapsody’s growth was not merely a reflection of market-level changes, but a direct result of its redoubled advertising efforts, its commitment to broad partnerships such as those with MTV Networks and Verizon Wireless and the fact that the streaming service competes in a niche alongside rather than in direct competition with iTunes.
“iTunes dominates this market,” says Karl Joyce, lead author of the TEMPO study, in a tatement, “but that by no means suggests that there isn’t room for innovative competitors with differentiated offerings. This is precisely who, according to our research, consumers are paying attention to and rewarding with their patronage. Amazon – unique for offering DRM-free downloads from the catalogues of not one, but all four majors – has done quite well in its first year, easily establishing a place for itself among the other top brands operating in iTunes’ shadow. And then there is the story of Rhapsody. Rhapsody is a success story in how to build a brand’s power through increased awareness. Yet despite this strengthening among key competitors, iTunes’ dominance remains unchecked.”
“The reason iTunes’ brand strength has not weakened in light of increasing competitive pressure is that, during this same time frame, consumers became more demanding of the digital music services they use,” explains Joyce. “Table stakes such as good sound quality, variety, and being a reputable brand grew significantly in importance versus both of the past two years. As a result of this, lesser-known brands who fail to add unique value and whose offerings are limited are beginning to lose out in favor of larger, more robust services able to meet all of these consumer demands.”
Top brands cement power while others decline.
• Many service attributes increased in importance in 2008 versus both of the past two years.
• Amazon’s 9% share and iTunes’ and Rhapsody’s 7% and 3% respective increases as ‘best brand’ came predominantly at the expensive of lesser-known brands, though other top brands did share some of the burden.
• For many secondary brands, total awareness, familiarity, and favorability decreased as well.
“Consolidation of brand power among a handful of larger, better-known digital music services will continue. In this space, halo effects have had a real impact on consumer awareness and usage; if not always on brand perceptions,” continues Joyce. “We have seen this with iTunes, Yahoo!, Wal-Mart, MySpace and, now, Amazon. And, just days ago BestBuy acquired Napster, a brand that has ridden a different kind of halo – residual awareness from its stint as the first filesharing service – for years. This acquisition is exactly the type of move we should anticipate as this sector continues to evolve. A dedicated or small digital music brand trying to break into this space will not be able to sustain market share unless its offering is truly unique. To-date, Rhapsody is the only top-tier digital music brand without strong, pre-existing brand strength in some other arena.
“New innovations are sure to change this market. New models, especially those based upon ad-supported streaming, are sure to bring new brands into the space. At the end of the day, though, the digital music market is maturing. Consolidation or closure among many of the smaller players seems inevitable at this point.”
Data on music downloading behaviors was gathered from TEMPO: Keeping Pace with Digital Music Behavior, a quarterly shared-cost research study by Ipsos MediaCT examining the ongoing influence and effects of digital music in the US.
Data for this release were collected between July 15 and July 28, 2008, via a web-based representative sample of 1,249 US Downloaders aged 12 and over. With a total sample size of 1,249, one can say with 95% certainty that the results are accurate to within +/- 2.77%. Learn more about the methodology of TEMPO here.
Source: Ipsos
[Attribution: Retailer Daily]
Interesting, but, not a surprise.
Apple has an advantage when it comes to selling digital music.
Almost everyone else sells music to make money selling music. Apple sells music to make money selling iPods. While I’m sure Apple makes some profit running the iTunes Store, it’s almost a value-added service for iPod (and iPhone) customers, not a profit center. And as the market leader, Apple can set the pricing.
How can the others compete…? Apple is not even playing the same game.
@ ken1w
Exactly. Add to that iTunesU and all the other free programming in the iTunes Store. Much of that material is not available anywhere else for download; there is little demand for it.
If Apple ever offers a subscription service alongside their pay-as-you-go download model, it will be game-set-match.
Why would Apple want to offer a subscription service?
I think Apple should advertise the fact that pretty much any artist can get their music sold on iTunes. I’m willing to bet that there are many musicians out there that do not know this.
bluegirl,
To steal the last customers away from the subscription services.
As CFO Oppenheimer has stated, Apple has left no room under the umbrella for others to compete.
iTunes RULES!!
Best product hands down.
“I think he can be ready, but right now I don’t believe he is. The presidency is not something that lends itself to on-the-job training.” “I think I stand by the statement.” Senator Biden (D)
“Over the past several days, Senator Obama’s assertions about foreign and military affairs have been, frankly, confusing and confused. He has made threats he should not make and made unwise categorical statements about military options.
“We are facing a dangerous and complicated world. The next President will require a level of understanding and judgment unprecedented in American history to address these challenges.” – Senator Dodd (D)
Yes, iTunes does RULE!!
“I have not had a chance to see it in writing, so I have to examine it.'” –on the Bush administration’s Wall Street bailout plan, which was a three-page document that McCain said he received the day before, interview with WKYC in Cleveland, Sept. 23, 2008
“The chairman of the SEC serves at the appointment of the president and, in my view, has betrayed the public’s trust. If I were president today, I would fire him.” –McCain is apparently unaware of the fact that the SEC chairman, as a commissioner of an independent regulatory commission, cannot be removed by the president, Cedar Rapids, Iowa, Sept. 18, 2008
“At least I don’t plaster on the makeup like a trollop, you c*nt.” –to his wife, Cindy, after she playfully twirled [McCain’s] hair and said “You’re getting a little thin up there,” as reported in the book The Real McCain by Cliff Schecter
“Make it a hundred…That would be fine with me.” — McCain to a questioner who asked if he supported President Bush’s vision for keeping U.S. troops in Iraq for 50 years, Derry, New Hampshire, Jan. 3, 2008
“Our economy, I think, is still — the fundamentals of our economy are strong.” — McCain, Jacksonville, Fla., Sept. 15, 2008
ITunes, is there another??
“That one<——” McCain!
The fact that Rhapsody has been a relative success (in its market niche) is enough of a confirmation that a subscription model can make Apple money. They need to begin offering it for one main reason: to choke Rhapsody’s oxigen supply, thereby gaining even greater market share in music distribution. They need to get to the point where Amazon has absolutely no room to grow, since the only remaining competitor would be iTunes.
We need labels to remove DRM from iTunes. The only way Apple can do that is if they were so dominant that the labels wouldn’t have a choice. Right now, they still believe they might have a way to undermine iTunes.
I thought Ballmer said Zune is rapidly gaining and will kill iTunes and iPods soon. Or are they still aiming for for the newborns who doesn’t have iPods yet to start using Zune?
Just out of interest.
We know that Apple makes a fairly small profit on the iTunes store. Are any of the other music download services known to be trading at a profit ?
> Are any of the other music download services known to be trading at a profit ?
If you means making a profit, probably not. That’s Apple’s huge advantage and demonstrates how Apple chooses to compete by playing by a different set of rules. Being the market leader, Apple can set the de-facto price for a legally downloaded song. Apple can underprice everyone else, because the iTunes Store can be a break-even venture; everyone else needs to profit from the sale of music. And Apple has the efficiency of selling at a high volume.
Amazon is the only contender that can potentially match Apple. Since Amazon is also a huge iPod distributor, I don’t think Apple minds if Amazon succeeds with music downloads as long as that music is being played on iPods.
I do agree that Apple has got the best service around.
And I do agree with Predrag and Cubert
Apple’s Pay-as-you-go is great for kids and a irregular user making an odd purchase here and there. But for musical nuts, a subscription service would be a sure fire way to pump a set amount of dollars out of them every month even if they downloaded alot of music or not, therefore, making Apple more profitable through their iTunes store.
And being well established, they already have the resources, and could also, offer BOTH pay as you go, or Subscription.
When someone signs up to the store, they should be given that option to choose, and current users should be able to change to subscription in their account prefs.
And if they don’t like it, they should be able to opt-out and go back to pay as you go.
This would certainly put a dampner on the likes of Rhapsody.
And Apple could be the leader in the cheapest subscription service, as being a real pioneer with setting the price standard in pay-as-you-go purchases, they could give an extremely competitive price.
Apple will have to manage the bloat to keep users happy. The complexity of the latest iTunes and portable devices are leading to more synch/connectivity issues.
When every road leads to Rome, expect a helluva traffic jam when you get there. And sometimes, gridlock.
Every one admits that our life is not very cheap, however some people require money for various stuff and not every man earns enough money. So to receive quick loans and financial loan will be a correct solution.
Yeah doubtless very
contributive for the readers it was pleasant to read about this good topic! If you need to get a great job firstofall you need resume company. Study and don’t forget – if you have to work and study at the same time, there areexperts who are ready to assist you with your resume when you under time heaviness and looking for a great job.
Every point has got its solution. Thence, to purchase term papers at term papers writing service would be a correct solution, I can tell you.
I know, your theme referring to this good topic suppose to be good enough and people will select the essays writers to buy essays and essays written close to that!
Wow, I’m very impressed. Essay Company have afford a famous writing services! The excellence of essays and text is notable. I now feel I have something sensible to write my own term paper on, with such expertise to suggest me in the actual orientation I can only move up and get superior marks. I will be advice this crew to all my class mates and collegues.
Don’t want to destroy degree and do not realize a right way to complete perfect quality business essay? I think that it’s not the biggest problem, simply because the experts essays writing organizations are able to help.
Do you represent the writing jobs service? Your ideas about this post seems to be smashing.
If people are insure what to choose, college essays or just africa essay paper, they have to turn to you, coz you do know the proper way to write the awesome theme referring to this good topic.