Apple’s iTunes Threat

Thursday, Oct. 2 2008 | Author: Mr Butterscotch

A British entrepreneur has spoken out against Apple’s threat to pull the iTunes service, claiming that Apple are “holding its customers to ransom”. I’d actually have to agree with Gary Morris (the chief Executive of iLoaded), as Apple does an extremely good job of locking customers into only using their own software – a reason why I’ve never bought an iPod in fact.

The row began today after the legislation in the US threatened an increase of royalty payments for each track bought – moving from 9 cents to 15. This might not sound like much, but it’s actually a 66% rise – not exactly marginal I’m sure you’d agree. I know I’d certainly like a 66% pay rise!

The extra cost would be met by music services sites that would no doubt pass the expense on to the consumer – which makes Apple’s threat of shutting down seem extremely silly indeed. From a business point of view, whilst it probably wouldn’t help them make more money, the fact that they passed on the charge to the consumer would mean they don’t make losses from this move. The reason I say that is you’ll still have iTunes customers shopping there, it is, after all, only an increase of what ultimately works out as 6 cents per tune.

Some sites are of course reporting this wrongly and suggesting that iPods would be made redundant. This of course isn’t true. However, it may well see the number of CD albums sold rise – as people then convert them to the file format needed before they play on their iPod. Some would see this as a good thing for the music industry.

Apple may well have declined to comment but I hardly believe that their service that has more than 8 million songs is about to go anywhere, any time soon.