iTunes a hit

by Zuki on August 16, 2005

Apple’s iTunes store launched early August and has already proved a hit with more than 1 million downloads in four days. Although local music companies forced prices of ¥200 for songs by many Japanese artists, the bulk of the music library of international music costs ¥150 per song, substantially lower than the prices in local CD stores and competing online music services. As a result, the iTunes store has sold twice as many songs in four days than the competing services sell in a month combined. And Apple still has not signed Sony Music, which has been dragging its feet, probably due to the fact that it wants to hinder Apple’s progress in Sony’s home market where it competes on both music downloads and sales of music players. However, Apple’s allure has caused a number of artists signed to Sony labels to rebel and attempt to sign up with Apple directly. Motoharu Sano has already offered Apple his songs directly, and more importantly at the lower price of ¥150, flying in the face of the attempts by Japanese music firms to force higher prices on Apple. AP reports that Amuse, one of the biggest agencies for artists in Japan, has also suggested it might negotiate directly with iTunes. While this might not be a significant issue elsewhere, in Japan, this could have a major effect on music distribution; Japanese agencies are much more powerful than their European and US counterparts and handle most of the artist and music production. Many have battled with the music distributors over the years for greater share of revenue and influence, and the launch of iTunes could provide the catalyst that leads them to break away from the distributors. Since the latter relied on their lock on retail for their influence, iTunes could provide agencies the chance to cut out the middle man entirely and distribute through online services only. The music distributors won’t give up without a fight of course, including some political muscle, but the launch of iTunes here could well turn out to mean more than just cheaper songs.

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