Apple's itunes service gives users the ability to download the songs they like for 99 cents.
Chances are that you already know it, since it's the largest music shop in the world. It is so large that the 1 billionth song was downloaded recently.
The amazing thing is the growth factor. Half of the 1B songs were downloaded in the last 6 months. This means that every day almost 3 million songs are being downloaded.
It is safe to say that the music industry have passed a revolution. The sales of iTunes show that media has become ubiquitous and that users do not need to see a plastic box and a nice leaflet to enjoy music. It can be totally digital and reside in memories of players and computers.
iTunes success also shows that the users, when offered low cost and choice, happily pay for media even if it can be obtained for free.
What are the conclusions for the future of media?
First of all the software companies should look very closely at the iTunes model.
Take Microsoft for example. Their overpriced office and Windows packages are now being bought by customers because of lack of choice. May prefer a pirate copy over paying the high costs of acquisition and upgrade. What if Microsoft decides to give it's packages in a more customizable ways for lower costs ? For example Word, PowerPoint, Excel and Outlook for $10 each? Microsoft may find itself with more customers, less competitors and lower piracy costs. Bottom line can rise because people will buy more products from Microsoft which they didn't intend to buy in the first place. Costs of computing will be reduced and more computers will be introduced in schools and poor countries increasing the market for Microsoft. And important of all, users of their products will be supporters of the company instead of hostage customers biting their lips and waiting for cheaper Microsoft replacement products from other companies and open source. When there will be more compatible replacement products, Microsoft wouldn't want to be in its current position of the inevitable bad partner of every computer user.
Besides software companies, Hollywood is next in line. Downloading of legal full length movies is just around the corner with the improvements in broadband. It will be a shame for the music industry to spend large amounts of money on fighting piracy in an endless battle instead of investing the money in low cost distribution where larger amount of users can watch new movies cheaply. Judging on iTunes case, Hollywood should turn the download phenomena into its future instead of fighting it.
What about other services that are duplicative and cost less to distribute when downloaded instead of being sold in boxes? Ebooks definitely fall into this category. As soon as their quality will match paper quality, books will be downloaded cheaply just like iTunes music. In fact, newspapers, magazines will be downloaded as their primary distribution channel.
