Much has been made of the “news” that Amazon’s MP3 store is now the #2 online retailer in digital music. You can absorb some various thoughts on this in these articles:
And then of course there are the myriad re-hashes of the USA Today article syndicated in papers everywhere, as well as other articles parroting the story as if iTunes is somehow being threatened.
First, there has always been a #2 in online music sales. Always. I mean, unless there’s only one store doing the selling, then someone is #2. Did we ever care about who it was before? Did it ever matter? No.
In fact, iTunes is so far in the lead that even referring to the next one as a ‘distant second’ is still an understatement. Like being the tallest midget, it’s a dubious distinction.
Second, I tend to agree with eMusic on their being #2. The big labels sure as hell don’t want to discuss Indie labels. They never have. So naturally they don’t bother considering eMusic, but who said the labels get to set the agenda (well, except for USA Today, who wrote the article for the labels’ benefit)?
Bottom line for me is that until some hard numbers on the Amazon store are published, eMusic’s claim, backed up with legitimate sales figures, will hold sway. Though, again, who is truly #2 ultimately doesn’t matter.
Third, I’ve written about this before, but the “collusion” the labels are showing against iTunes is pretty clear. I used to be concerned about it, but now I think it’s self-defeating, and will backfire on them.
- They don’t want Apple to sell DRM-free music.
- They don’t like Apple’s low prices.
- They want bundling, which Apple is against.
And yet, in their deals with Amazon:
- They’re allowing DRM-free music (at high quality, too).
- The prices are less.
- There’s no bundling to speak of.
As I stated at the time, I believed the labels’ plan was for Amazon to get a foothold, and then the labels would slowly start to make changes in pricing, etc.
However, given that six months later the labels have resorted to planting stories to make it appear Amazon is becoming a force in the market, it would seem it hasn’t taken off as fast as they’d hoped (it also shows their lack of patience).
So, in another six months, or a year, or whatever, if Amazon is deemed “big enough”, and the labels try to pull the trigger on pricing and bundling changes, I believe they’ll be unable to do it. The minute the (small) price advantage Amazon has over iTunes goes away, so will their customers.
In short, having offered something “better”, the labels will not be able to pull it away as they had hoped.
Finally, I think Amazon’s inability to truly kick ass is because of a fundamental issue I have with most of the online stores: Price.
How many people paid the $18 list price for a CD? Most used Wal-Mart, Target, used CD stores, etc. and paid $13 or less. Since digital music has no packaging, liner notes, physical media, duplication costs, and are lower quality, the idea that an album should cost $10 is ridiculous. In the digital world, $6 ought to be about right. Heck, if Sony/BMG can sell their physical CDs for $5.99, then there’s no excuse for digital versions to not be the same or less.
Radiohead’s “In Rainbows” offering should have made one thing clear. While many took the album for free, the average price was $6. Seems to me this was the consumers’ way of saying what the true price of a popular digital album should be. Too bad the labels paid no attention.