SIGNALS

What's Wrong with iTunes?

Ken C. Pohlmann  |  Oct 10, 2017

The plan was straightforward. Founded on the overwhelming popularity of the iPod, and then boosted by the dominance of the iPhone, iTunes was ready to own audio and video downloads and streaming. The executives in Cupertino probably had a calendar on the wall, with the exact date of achieving world domination circled in red. That hasn't worked out.

Back in the old days, people bought plastic things that had music and movies encoded on them. Youngsters won't believe this, but there were actually entire stores with names like Tower, Peaches, Sam Goody, and Blockbuster where you could buy or rent those pieces of plastic. That abruptly ended when people started to illegally download the content, skipping the plastic altogether. Apple smartly anticipated that downloading, made legal, was the future and that it would go hand in hand with their hardware business. The executives were smart, and they were correct. The iPod, along with iTunes, changed the music business forever.

It was only a small step for Apple to add streaming and transition from dedicated iPods to multipurpose iPhones, and also to add video. Surely with its fingers in all these pies, and having a solid presence in both the hardware and content sides, Apple was poised to own the music retail market.

As it turns out, although iTunes is huge, its presence is far from dominating. There's nothing particularly wrong with iTunes, it's just that now there's lots of competition. Music listeners can turn to any number of sources for their daily fix. As a result of this, and other market conditions, Apple's share of the music market is shrinking.

Things are even tougher on the video side. Amazon and Comcast are going all PacMan on the digital-movie business, gobbling up chunks of Apple's market share. Five years ago, Apple owned about half of the movie rental/purchase market; now it's estimated to be down to 20% to 35% (there is no reliable tracking data for this market share).

Is Apple in danger of losing the battle for the digital movie business? Could a company with such a head start on the competition, with such a reputation for forward thinking, and with such vast resources, wind up being second or third fiddle in a business that it surely had already taken for granted? Maybe.

Perhaps the problem is that Apple has too many internal warring factions, competing for attention. For example, last month Apple announced that iTunes would be getting 4K HDR movies. Yippee! But, they are only for Apple TV streaming, not for downloading. Well, that might help sales of the new Apple TV, but won't really help the iTunes Store gain market share. Yes, previously purchased Full HD content will be upgraded to 4K HDR, but only for streaming.

It is certainly true that 4K HDR files are huge, and not really suitable for storage on most Apple devices. And, it's not clear that iPhones and iPads can play HDR either (Apple TV 4K can, with the right format). Or maybe this is the issue: reportedly, Hollywood studios wanted 4K movies to cost $25 to $30 on iTunes, but Apple is selling them for the same price as Full HD movies. Maybe Apple agreed not to allow downloading in return for this pricing strategy.

In any case, high-res video downloading on iTunes is lacking, and this is a problem because sometimes, for whatever reason, you just want to watch a movie offline. And this deficiency gives other content providers the opportunity to keep gobbling up market share.

COMMENTS
ednaz's picture
Submitted by ednaz on October 10, 2017 - 7:34am

...but for me, iTunes started on a high - "wow, what a great idea" back when they first got going, and has been luge-ing downhill ever since. I don't remember the exact date (too far in the past) but at some point I listened to the iTunes high resolution compressed version of an album and the HDTracks version, and said, nope, no more iTunes purchases. Apple TV always had something missing that was out there in either my cable provider or my streaming video system, so never made it into my systems. Honestly, though, the sound quality difference between iTunes and the burgeoning HD world also played a part - what compromises were they going to try to sneak on me in Apple TV.

So far they've kept me for my laptops and tablets, and I enjoy my Apple watch. But a crack may now be opening on laptops - I can get a MUCH higher spec, higher performance Windows laptop now for almost a thousand dollars less. Up until recently, Apple's commitment to having at least one laptop that was spec'd like a desktop kept me on board- as a photographer shooting 40-100mp cameras, I need that power. But now, they don't have the most powerful setups, and want a crazy premium for what they do have... and went and changed all the peripherals' interfaces so I have to re-buy.

Ah, Steve... I used to give you the food off my cafeteria tray, and you repaid me millions of times over at Apple. I do miss you, but Apple misses you even more.

drny's picture
Submitted by drny on October 10, 2017 - 11:23am

Apple's short coming is that it always takes the posture of a monopoly.
The consumer has to swallow it if and when they're the only option or they are the far better technological option.
However the price gauging will immediately open the door for a mass exit as soon competitors offer a similar product at a far reduce cost.
Please cry me a river when it comes to Apple and Microsoft.
They will shake the last dime of the individual consumer.

pw's picture
Submitted by pw on October 10, 2017 - 3:47pm

Tidal sounds better and with MQA Hi Rez can't be touched by Apple..

cawgijoe1's picture
Submitted by cawgijoe1 on October 11, 2017 - 5:36am

Apple came out with Apple Music for streaming. Many people I know would rather pay a monthly amount to stream as much music as they would like rather than buying each song or album. That has taken away from iTunes.
I subscribed to Apple Music for about six months and though I enjoyed it, what was missing for me was hi-res music. Apple Music sounds fine, but once you hear true high resolution music, you are wanting for more.

If Apple would take the plunge into hi-res music and undercut Tidal in terms of cost, I think they could really take over. That would also put pressure on Tidal to lower fees. A little competition is always good for the consumer.

Just my .02 on iTunes.

boulderskies's picture
Submitted by boulderskies on October 12, 2017 - 9:05am

I've been with iTunes for about 9 years now. Based on that experience, I see a coupla problems:
1. Behind the curve. iTunes (ie, Apple) always seems to be behind the curve. They were slow to adopt streaming. Now they're dragging their feet with Hi-Rez. They have something silly called Mixed For iTunes which I initially re-joiced at: "COOL! They've finally got something a little better than AAC!" Not really. I listened REALLY hard to one song in both Mixed for iTunes and the CD version copied to iTunes. ZIP.
2. iTunes seems to have tried to be all things to all people, coming out with ridiculous updates which do nothing but move things around dumbing down the overall experience. The net dumbing down effect is to actually make it harder to do what I used to do easily.
3. Finally video. Why would anyone use iTunes for movies? I still dont get that. Not with NetFlix and other alternatives.
Just my two cents...
Scott

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