Apple’s revolutionary iTunes turns 10, faces new challenges

13 years ago

“When Apple launched its iTunes music store a decade ago amid the ashes of Napster, the music industry — reeling from the effects of online piracy — was anxious to see how the new music service would shake out,” Nekesa Mumbi Moody reports for The Associated Press. “‘The sky was falling, and iTunes provided a place where we were going to monetize music and in theory stem the tide of piracy. So, it was certainly a solution for the time,’ said Michael McDonald, who co-founded ATO Records with Dave Matthews and whose Mick Management roster includes John Mayer and Ray LaMontagne.”

“The iTunes music store became much more than a solution; it changed how we consume music and access entertainment,” Moody reports. “It’s not only music’s biggest retailer, it also dominates the digital video market, capturing 67 percent of the TV show sale market and 65 percent of the movie sale market, according to information company NPD group. Its apps are the most profitable, it has expanded to books and magazines, and it is now available in 119 countries. This week, iTunes posted a record $2.4 billion in revenue in first-quarter earnings.”

Moody reports, “But as iTunes celebrates its 10-year mark Sunday, it faces renewed scrutiny on how it will continue to dominate in the next decade — or whether it can. With competition from subscription services like Spotify and other services like Amazon.com, Netflix, Hulu and others, iTunes will likely need to reinvent itself to remain at the top of the digital entertainment perch… McDonald believes subscription services may become the standard… But he doesn’t count Apple out in that future: ‘It may be that Apple and iTunes are going to create the best user space to own that space as well.'”

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