Do Media Tech Pundits Understand Up vs. Down?
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Posted: 18 December 2006 09:43 PM   [ Ignore ]  
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Sometimes I read articles online and rub my eyes in disbelief. It’s a never ending trail of rubbish. So it was last week with Forrester Research’s research showing iTunes Store sales going down. Who’s applauding this? Rob Enderle, media tech pundit.

Tucked neatly at the bottom of the latest in Enderle’s digital drivel in TechNewsWorld is the headline-- ”Apple’s Collapse.”

Collapse from what? The weight of Forrester’s tarnished report that iTunes sales are falling. Can anyone ever trust Forrester again?

Collapse from what? Enderle admits to being out of town, therefore out of touch, so I should cut him some slack. Until he starts typing again…

My ears, or, is it eyes? One of my senses perked up when I read this:

“Apple makes little or no money on iTunes music, but this music forms a switching cost barrier that prevents other MP3 products from cannibalizing existing Apple customers.”

Apple has never said the iTunes Store loses money, or breaks even. About all we can get is that there’s little profit to selling the music, more profit in selling iPods and accessories.

Between 1.5-billion and 2-billion songs have been downloaded from the iTunes Store so there’s bound to be a few pennies lining the quarterly statement of AAPL.

Regardless, the phrase “cost barrier” struck a nerve. There’s some accuracy there, though I wouldn’t use the term “cost” to describe the barrier to switching from iTunes Store or an iPod to something else.

There’s a “barrier” to moving from anything to anything, including from a troublesome Windows PC to a nearly trouble-free Mac with OS X. The barrier Enderle describes resides mostly in his head.

The so-called barrier he refers to is probably Apple’s Fairplay digital rights management (DRM) system inherent in iTunes and songs from the iTunes Store.

“In short, if you want to switch, you have to kiss off all your purchased tunes and then buy them again from someone else.”

Except that you don’t, so Rob is wrong. Again. How so? OK, I have a Mac and a Windows PC. I have music purchased from the iTunes Store. Assume that I’m ready to switch to a new SanDisk Sansa which is PC only, and ready to ditch my iPod and iTunes forever (already you’re thinking, “Jack-- you’re more of an idiot that this Enderle guy).

How do I get my iTunes music to the PC? Is it that hard?

Rob implies that there’s a trend going on with people dumping iPods, iTunes, and music from the iTunes Store.

“If fewer and fewer people buy music this way, this barrier gets weaker over time. That could be problematic for Apple, which is facing ever more-focused competitors.”

Ever more focused competitors? Who? Name one. In fact, name five competitors to Apple’s market dominating trio?

Wait? There’s more.

“Personally, I think this simply means that folks are realizing what a rip-off DRM (digital rights management)-protected downloaded music is, and they are going back to CDs so they can do what they want with the music they purchase.”

If they’re going back to CDs are CD sales going up? Are online sales going up or down? Which is it? Everyone but Forrester and Enderle indicate iTunes Store sales are continuing to grow.

The music industry says things are bad no matter what’s really happening, so their statements can’t be accepted as realistic or truthful.

Winning a Dumb Ass of the Week Award takes effort. After all, the week is yet young, but it’s hard to pass up such gems as this one.

“This may also indicate that buyers are getting fed up with how difficult it is to use downloaded music legally, and they want to stop funding an organization that treats music lovers as criminals.”

It’s difficult to use downloaded music legally? How so? It looks like tens of millions of iTunes Store customers have no trouble with Apple’s DRM scheme.

Worse, Rob just said Apple is treating music lovers as criminals but offers no proof. How about this? Rob is an idiot media tech pundit and the proof is available here, here, and here.

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Posted: 19 December 2006 05:17 AM   [ Ignore ]   [ # 1 ]  
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Could it just be there’s not much new interesting music? I could be wrong, I’m a bit out of touch media wise, but I get the impression that the pop music engine doesn’t have much steam this year.

Alternatively, I suspect that many digital savvy customers are spending all their discretionary income on allofmp3 tracks before it is closed down for good. Bit of a “Get it while you can” scenario that would cut the DRMed and retail channels out of the loop. The question I guess is how many, and what effect do they have on the market, and I doubt we’ll ever get that info.

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Posted: 19 December 2006 05:10 PM   [ Ignore ]   [ # 2 ]  
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I’m with Chevalier on the quality issue. I stick with artists I know and those artists that the artists I know respect (Steve Howe of Yes recently mentioned The Coral as a possible Prog Rock successor, and I found much of their music interesting for many of the reasons I enjoy Yes).

As to the Forrester report, one of their people blogged that the entire thing was taken out of context because those writing about it (the New York Times, et. al.) had not seen the full report and therefore did not have a clue what they were saying. For now I will take him at his word.

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Posted: 19 December 2006 08:09 PM   [ Ignore ]   [ # 3 ]  
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CD sales are never going up. Tower Records folded. I can’t say that I’m surprised. I believe album sales are down but I think that’s in large part due to the single friendly world we live in now. People are less inclined to buy an album when they can pick and choose the best tracks. Also, innovations in recording are making it much easier for artists to get their music out independently. Artists are more capable of handling the business side of things today and I look for that trend to continue. I don’t think music is going away but the business model is definitely evolving.

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Posted: 13 June 2007 12:51 PM   [ Ignore ]   [ # 4 ]  
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Good to see Miss Bambi back at home, despite the name change. You broke a lot of hearts, babe!!

The question is a good one considering that the internet has become a place for publishing. There’s probably more crap being published online than there is in mainstream media-- but there’s some very good analysis and thought taking place online, too. I think of it as the Wild Wild West of a century or so ago in the US.

There’s order amid the chaos. There’s value amid the trash.

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Posted: 26 July 2007 08:36 PM   [ Ignore ]   [ # 5 ]  
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Can I nominate John Dvorak as the Dumbass of the 21st century? I know it’s early in the new millennium, but he’s just such a ripe character and perfect for the designation. Even when switching to the Mac he pleads blind and refuses to admit that the Mac just works better.

PS - my bad. Bambi beat me to it already. In the forums no less. I gotta pay more attention when I log in.

wink

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Posted: 30 July 2007 09:29 AM   [ Ignore ]   [ # 6 ]  
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I think that Apple has actually said they don’t make money on the music store.  For them it is a way to give people an easy way to get leagally downloaded music to put on their iPod, which is what Apple is really wanting you to buy.  Fact is as long as people are illegally sharing music for free any format, cd, legal purchased download is going to suffer.  As for the “barrier” well there are easy ways to strip the DRm from iTunes puchased songs, as well as now you can buy certain ones DRM free.  If they go to all DRM free I think business will pick up.

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