iTunes is arguably the most popular and preferred file sharing program used by today’s generation. The use of iTunes to upload, download, and organize music, videos, and other forms of media is a very common practice and is done constantly by millions of people around the world. The views of iTunes are very controversial and there are many different opinions of iTunes throughout different sectors in the industry. The viewpoints are broken down throughout the paper by sector and then more specifically within each sector. On the surface, it seems very easy to have a strictly “thumbs up” or “thumbs down” opinion of iTunes, but after reading this paper, it will be easier to see that it is nearly impossible to view iTunes as good or bad but usually somewhere in the middle.

            Finding an actual break down of the distribution of profits of each track sold on iTunes is very difficult. Each recording artist has a different contract with their recording company, and because not all tracks on iTunes is the same, the cut that Apple automatically receives is not a set amount. In most cases, Apple takes approximately 35% of each track sold leaving 65% to be dispersed between record companies and the recording artist. Again depending on contracts, record companies usually take anywhere from 50% to 80% of their cut, leaving only 20% to 50% for the artists.

           

Apple’s Opinion (Thumbs Up) 

            By far the easiest to analyze is the view of iTunes from Apple. iTunes is a product of Apple and has been a very successful product for Apple. Every individual song that a person downloads costs anywhere from 99 cents or higher and songs only become cheaper when you buy an entire album. This has brought in a significant amount of money to Apple from the music industry. Apple must be very happy because before the production of iTunes, Apple never had any reason to receive any money from the music industry. Apple has become a third party vendor between the artists and the record companies producing the music and the people purchasing the music. iTunes has created a huge spotlight for Apple, especially with the related products created that are compatible with iTunes; iPod, iPhone, iPad, etc.

           

Record Companies Opinion (Thumbs Down)

            Record companies are arguably getting hurt the worst by the overwhelming use of iTunes. The music that people download from iTunes is of comparable costs to purchasing the hard copy of the album from a store. iTunes has revolutionized the music industry and has assisted music into easily being put onto mp3 players, mp4 players, etc. Compact discs, records, cassette tapes, and things of this nature are clearly not much of a need anymore and music is now not largely demanded in any hard copy format. Not only have record sales decreased significantly due to people only wanting digital music, the majority of people are purchasing their music off of iTunes. Since iTunes is now making money off of each song that is being sold, the record companies will be making less per song than prior to the digital era. Before digital music, the record companies used to receive the profits that iTunes is now receiving.         

 Record sales have decreased significantly as of recent. Tower Records, which was consistently voted “Retailer of the Year” filed for bankruptcy in 2004 because record sales were suffering significantly. A study “Did iTunes Kill the Record Store?”1 showed that maybe iTunes alone did not kill the record store, but digital music as a whole has killed record stores nationwide. Their results: in 1991 there were 9,500 chain music stores and in 2006 the amount of chain music stores had decreased to 2,000. Alternatively, from 2004 to 2005 alone, the amount of CDs shipped decreased 8% while the amount of albums downloaded from the internet increased almost 200%, in just a year alone!

            Clearly these statistics show that record companies do not think positively on the use of online downloading sites and especially iTunes. Since iTunes is by far the leading place for digital download, the record companies will not be supportive of iTunes.

 

Recording Artists Opinion (Thumbs Between Sideways and Down)

            It is very difficult to analyze a recording artist’s perspective on iTunes. Many artists have very different opinions about iTunes and there are a few different areas that artists look into when assessing their opinion of iTunes.

The first we will look into is the category of the local bands, up and coming artists, and artists who are not very famous. Most of the time, these types of artists are usually pro iTunes. Most of these artists are putting their music on iTunes because they simply want their music to get out to the public. This is big benefit of iTunes; there is an overwhelming amount of music available and the click of a few buttons. On iTunes, the underground bands are easier to find by using the search feature on iTunes and searching by genre. Also, these bands and artists are typically not trying to make money from their music so the insignificant amount of money received per track by the artist from iTunes is not a big factor in the minds of these artists.

Although small artists may like how iTunes publicizes their music, many local bands try to publicize their music in many other ways that will be more profitable. A local Buffalo band, the Early Attic2, discussed this matter during an interview. Brian Gorman, the Early Attic bassist mentioned that his band does use iTunes to sell their music, but the majority of their music is not sold on iTunes and they do not encourage fans to purchase their music on iTunes. This is because they encourage fans to purchase physical CDs which they sell for only $5 – the same price as downloading a digital copy. Also, the Early Attic uses a program called Nimbit to allow fans to download music. Nimbit is a comparable program to iTunes and Gorman claims that Nimbit is much simpler to use than iTunes because they allow you to put links to Nimbit on social networking sites like MySpace and Facebook. Since most of the downloading generation uses social networking sites, it is much easier to show people your songs when you post it directly to the sites they view on a regular basis.

Another small, local band actually created a study to figure out the best way to maximize their revenue.3 They put their music up online, but not on iTunes for their fans to download legally and for free. A short while later, they also made their music available on iTunes to purchase for 99 cents per track. After the band toured for a while, they stopped allowing the free download of their music. Surprisingly, the sale of their music on iTunes decreased after this occurred.  The band presented this information to show that even though you would think that fans would clearly download free songs over paying for them, once the songs are not available for free anymore, people are still not willing to purchase them. After the study was finished, they allowed the free download of their songs again. The opinion of this band is that all music should be sold for free and bands should focus on creating a fan base that will come to their concerts and support them that way. This band does not support the use of iTunes to sell their music and although their music is available on iTunes, they also encourage fans to find their music on their free site to download.

Next we should look into mainline artists. These are bands and artists who are very famous and make their living from the music they produce. Although the vast majority of these artists’ music is available on iTunes, one artist in particular is trying to rebel against the iTunes epidemic. In an interview with the Rolling Stones4, Kid Rock speaks out about his displeasure with the way that iTunes has changed the music industry. He says that since artists receive such little revenue from each track sold on iTunes, that he would rather his fans illegally download his music, learn the words to his songs so that they can sing along with him when he tours. Kid Rock says that the only money he makes is from touring anyways, so why should Apple make a huge profit on songs that are of no affiliation to Apple at all.

Weird Al Yankovic, a very popular comic artist, was asked by a fan whether he preferred fans to purchase his album online or at a record store. His response: at a record store.5 Weird Al actually makes more per track from an album than he would from the digital format. Weird Al mentioned that he was also very confused as to why he would make less money from a digital track than from actual CD and record sales because it costs a record label nothing to sell the digital album because there are no manufacturing costs, shipping, and other costs that go with creating a tangible album.

 

 

Consumers Opinion (Thumbs Sideways)

            When it comes to the people that listen to music, iTunes is definitely the first choice in popularity. When surveying a group of forty college aged students, 100% of the people claimed that they used iTunes to organize their music. Yet when these same forty people were asked whether they bought music on iTunes, only 65% of these people claimed to buy their music from iTunes. The question is where else do these people get their music from?

Well this answer is not so simple. As you can see the majority of people get their music by purchasing it on iTunes. This means that roughly 65% of people are very satisfied with iTunes and using iTunes for their music needs.

            The rest of the people who do not purchase music from iTunes, yet still use iTunes, must acquire their music from other sources. Whether they use illegal download sites, like torrents, other programs to purchase online music, like Nimbit or Amazon (who is currently become a bigger and bigger competitor with iTunes), or purchasing legitimate CDs and uploading them to their iTunes, these people all have it in common that they do not find the need to buy music from iTunes. So why do these people even use iTunes? The simple answer – because to listen to music other places than your computer you need to have a device to play this music and by far the most popular device for playing music is a form of iPod. Whether it is the iPod Touch, iPod Nano, iPhone, iPad, etc Apple has so deviously created the most popular multimedia players that only function by uploading all music to iTunes. Consumers are stuck in a very hard place. Even if consumers see flaws in iTunes, and wish to support different music downloading programs, iTunes basically forces its users to stay loyal to Apple.

            In the same survey from above, a question was asked: "If another program similar to iTunes was created but the artist and record companies received a bigger profit would you use that program even if it cost the same to use both programs?" The results were as following: 25% said yes, 2.5% said no, 45% said maybe and 27.5% said they don’t care who gets the money. These survey results are shown in the Pie Chart below.

These results go to show that although people approve of the use of iTunes, only 25% of the people are very loyal to iTunes and said no, they would not use another program if Apple received less of the profits. This means that if other programs were publicized and people allowed them to be equally as popular as iTunes, people would follow the trends to use the other programs. Until this happens, Apple will most likely stay the forerunner in music downloading programs.

            Also in this survey, participants were asked what if you purchase music on iTunes, what reasons do you have for buying music on iTunes? They could choose ease of use, largest variety of music, easy to search for new artists, and cost to download music. Most people chose ease of use – almost 90%, while the least chosen category was cost to download tracks – a mere two people, and less than ten percent. The results are shown in the graph below.

From this graph, one can conclude that iTunes is not really something special. If other programs were created that were just as easy to use as iTunes, they would probably be big hits as well.

            Julie Boc, a sophomore at Syracuse University, was interviewed about her opinions of iTunes. When asked do you use iTunes she replied “I can either pay $1.29 for one song, or download an entire album for free. Why buy the milk when you can get the whole cow for free?” Boc’s point is that if there is an abundance of free music floating around the internet; why not take advantage of it and save your money for something else.

 

Other Opinions to Consider (Thumb Between Sideways and Down)

1. Music Biz Academy is a website that has been created by David Nuvue to try to inform all artists on ways in which they can use the internet positively for making money from the music you create6. Initially a composer, pianist, and recording artist, Nuvue searched for ways that he could distribute his seven albums while still profiting by mainly online distribution. Nuvue has found many ways to make profits purely from internet music sales, with no touring and no record labels. On this website, Nuvue advertises a book that he wrote based on personal experiences on how to make selling music online profitable. The catch – you need to purchase his book to obtain his advice. It sounds great in theory, but if making your living on just profits from only selling music online is as easy as Nuvue claims, why aren’t more artists doing this? This might put up a red flag that perhaps Nuvue is just trying to scam people into buying his book, hoping people will fall for the get rich quick and easy trick.

2. All profits aside, it is interesting to look at the type of files that iTunes puts out. An mp3 which is currently the most popular file available on iTunes does not have the same musical qualities as music put out on compact discs or records. Mp3s cut out the highest and lowest pitches of all tracks turning them into slightly different soundings songs. Although to the unturned ear this change is unnoticeable, a trained ear can notice the difference. To these people, the poor quality of iTunes files, makes iTunes seem very undesirable.

 

 

Conclusion

 It is clear to see that iTunes has changed the music industry. Whether it is a good change or a bad change, there is no doubt that iTunes will not be leaving the industry anytime soon. I think that the best bet for everyone is to accept this change in the music industry and adapt to it, in order to maximize their profits in this new digital era. It is forecasted that record companies may begin to wean out of the music industry because more artists will be able to self record and simply put their music online, without the big need of record companies to manage bands anymore. Regardless of what changes will be made within the next decade, it is no doubt that iTunes and the rest of the digital generation of music has brought many good and bad things to the table. It will be very interesting to see what other changes will be made in the future to the music industry.

  

 

 

References

1 - http://www.roughlydrafted.com/RD/RDM.Tech.Q1.07/1C726ADF-0ED1-42D0-93D9-

     4FA4E698E94A.html

2 - http://www.myspace.com/earlyattic

3 - http://www.techdirt.com/articles/20090120/1942463468.shtml

4 - http://www.appletell.com/apple/comment/the-kid-loves-money-and-to-hate-itunes/

5 - http://www.cultofmac.com/infographic-most-artists-earn-more-revenue-through-itunes-than-

      at-retail/38097

6 - http://www.musicbizacademy.com/internet/interview1103.htm