When Napster launched in 1999, the digital music platform unleashed a disruptive tsunami of music discovery and file sharing, which famously caught the music business off guard. The high margin business of selling CDs was utterly decimated, prompting one major label executive to call for the internet to be banned.
Thankfully, the internet is still with us, and the digital music revolution has gone from strength to strength. The advent of streaming platforms like Spotify and Apple Music has largely rehabilitated music industry revenues, albeit without the artificially inflated margins which were baked into the CD format.
Arguably the turning point in the fortunes of the digital music business was the launch of the iTunes Music Store in 2003. Apple accomplished something which had eluded the beleaguered major labels up until that point, to make a consumer-friendly licensed digital music store that gave people easy access to the music they loved. Paired with Apple’s innovative iPod and iPhone devices, iTunes introduced a seamless customer experience (CX), which converted millions to the world of digital music.
In the intervening years, the iTunes app has been expanded to a become catch-all for many types of media consumption such as podcasts and internet radio, and also as a place to activate and back up iPhones. This week, Apple unveiled a suite of three new, more focused, apps designed to replace iTunes: Apple Music, Apple TV, and Apple Podcasts. Backup, restore, and syncing functions for the iPhone, iPad, and iPod are now integrated into the Finder in macOS Catalina. Apple has confirmed that “users will have access to their entire music library, whether they downloaded the songs, purchased them or ripped them from a CD” in a press release earlier this week.
As the first global giant of digital music transitions to its new incarnation, and loses its iconic brand name*, I spoke to some leading music industry experts about the remarkable legacy of iTunes.
Stephen O’Reilly has an influential role in the music industry as Director of ie:music and ie:ventures, who represent artists including Robbie Williams, Passenger and composer Craig Armstrong. His career has been at the very heart of the digital music evolution, as CMO of pioneering music app company Mobile Roadie, global head of sales & marketing at streaming hardware company Gramofon, and CMO at curated internet radio platform Shuffler.fm.
He reflects that iTunes ushered in the digital music era, and subsequently, the mobile music era: “iTunes empowered a meaningful and substantial digital revenue stream that was entirely new. The frictionless ease of buying a track on iTunes also made it easy for consumers to spend via their desktops, and subsequently on the iPod and iPhone. The ease at which people could spend money on digital music instead of going off to Napster or other illegal sites made a huge difference. Probably only Steve Jobs could have persuaded the record industry to embrace the iTunes 99c per track / 9.99 per album business model.”
O’Reilly reflects that iTunes transformed the perception of music which had been damaged so much by the file-sharing boom: “iTunes put a value on digital music, instead of the concept that ‘digital equals free.’ Apple, through the acquisition of Beats Music, is ensuring that Apple Music will become a juggernaut, and are much-welcomed competition in the healthy streaming landscape.”
O’Reilly is also highly supportive of Apple’s curation-led strategy: “I think Apple will continue to double down on human-powered curation and context . Beats 1 Radio, for all its detractors, is still great, and it proves that tastemakers and curators on radio combined with a killer streaming service are a vital combination.” Like many in the music industry, O’Reilly would like to see more paid subscribers to streaming services, to ensure that artists and writers are fairly compensated for their work as CD and iTunes sales fade away.
Vickie Nauman is an in-demand consultant and advisor in the music industry as Founder of CrossBorderWorks. Her stellar career includes roles as President of 7digital Inc (U.S.) and Content Producer for MusicNet, both iTunes competitors, and also as Global Alliance Manager for leading music hardware company Sonos. Nauman is candid on the impact of iTunes on consumers worldwide, “iTunes created a much-needed sense of order in digital music in 2003, not only for consumers, who could buy the singles they wanted at a price they understood for easy playback on their devices, but also for the music industry, with a new model around a la carte downloads.”
She reflects that Apple’s focus on CX made a massive difference to digital music adoption: “iTunes ushered in a new era in digital music with legally licensed songs and albums that helped many consumers make a transition from buying physical goods into buying digital goods. That bridge was essential as these were early days, and nascent were our phones, networks and operating systems. But Apple’s hardware/software/content integration evolved over time, and helped shine a light on the elegance and portability of a collection of music.”
Nauman is optimistic about new opportunities from digital music innovation: “I’m looking forward to the next generation of music experiences beyond today’s streaming models—music is ripe for segmentation and consumers are just as passionate now as they were 18 years ago about new ways to experience the music they love .”
*addendum – the iTunes Music Store – and the option to buy and download music – remains but the functionality is being moved to a sidebar in the new Apple Music app for Mac. On Windows and iOS, the iTunes app is unchanged for now.
Originally published in Forbes.
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