The Ugly Music

Daily Deal was a clever scheme launched by Amazon which allowed music lovers to purchase music online at a reduced price one day before it was officially released (read iTunes). Amazon aggressively marketed the Daily Deal thus making it a very attractive proposition for the music labels. In the worldwide online digital music industry Apple rules almost 70% of the total market share. The other players like Amazon and Wal-Mart having some 12% each come a distant second. This move by Amazon would have been the death knell for Apple and would have eroded its monopoly.

On 24th February, 2010 iTunes Store, an online digital media store of Apple, sold its 10 billionth song. Within just seven years of opening the store Apple achieved this significant landmark through clever strategies and pricing models. It is no hidden fact that Apple’s moves have been widely criticized by its competitors. By 2010 it had four antitrust lawsuits filed against it. One of its greatly criticized strategies was use of FairPlay. For digital rights management (DRM) the company used FairPlay a technology originally created by Veridisc. Any form of media purchased from iTunes store used to be encrypted with FairPlay which prevented the user to play the music in unauthorized computers.

Apple had to face quite a few lawsuits against Fair- Play. In 2005 an antitrust case was filed saying that FairPlay forced out competitors as the music sold by iTunes Store could be played in only Apple’s own music player. Most of the complaints have been dropped, but one antitrust lawsuit is still going on. As time passed Apple shifted to selling DRM free music under the name of Apple iTunes Plus. Apple has a history of aggressive moves which usually tends to leave competitors cold. Its steep ascendancy has always alarmed the Justice Department. The regulators are now investigating possible antitrust issues rooted in Apple allegedly using its clout to squash smaller competitors.

The suspicion stems from a recent report by Bill-Board magazine which alleges that Apple has forbidden record label’s to participate in Amazon’s “Daily Deal”. For music labels not finding a spot on the iTune’s page is equivalent to premature death. Commanding almost 27% of all the music sales in U.S. Apple can easily dictate terms to the music companies. Now, the question is are these allegations true? Did Apple really abuse its power of being a monopoly? Interestingly another question also creeps into this discussion. Do the music labels really want to break free of Apple’s hold? They are the ones who decided to lock their songs with DRM thus forcing users to choose between Apple’s iTunes/iPod platforms or the lousy one by Microsoft. That leaves the users with no choice but to flock to Apple. They could have rather licensed their stuff to cheap subscription service. The music could have thus been sold at a cheap rate hence attracting the users. iTunes then would have never achieved the monopoly it now enjoys. It seems the music labels prefer Apple’s dominance rather than risk any such new strategy.

Sayani is a graceful damsel by heart and a finance-crazy girl by head. She claims to have about 5 girls as her roommates in the hostel. She loves reading whether they’re textbooks or fiction novels. She is usually seen studying at wee hours of the morning. With a great sense of humour to add to her good charm, she is balanced with the right mix of seriousness and fun. This is the best that can ever be written about an author in this magazine. Sayani, you’re a lucky girl!