iTunes must die.
We currently sit atop the debris of post 90’s web 2.0 ideologies. The Internet, we were told, would lead to the democratisation of everything, filtering more money from the top of our economy to the bottom with more retailers and a fairer share of revenue.
The complete opposite has in fact happened and there is possibly no better example of this polarisation of wealth than by examining iTunes’ effect on the music industry over the last ten years.
Currently 1% of artists on iTunes bring in 77% of the revenue, 94% of content sells less than 100 copies and 34% of singles uploaded to the platform sell just one single copy (presumably to the artists mum’s).
Internet disruption has forced creative content producers across a number of fields to earn less for their work than ever before. This is true in journalism, publishing, videography and photography as well as in music. The Silicon Valley mantra for this devaluation is ‘content wants to be free’.
Apple is a prime example of a company that would not have been the success story it is today without music. The iPod wouldn’t have been as commercially successful as it was without iTunes, which in turn taught consumers about Apple’s design and brand values and led them away from a Microsoft dominated computer and mobile market.
It was also iTunes that really started the south-spiraling race to the bottom of the cost of legally consumed music. Steve Jobs coerced the top end of the music industry to set the price of a single on iTunes at under £1 on the proviso that piracy was a result of music being too pricey and because most of the internal costs of production are in the packaging.
Of course this is not the case. The value of music is derived from its intellectual property, something that book publishers have done a better job of controlling than the music business.
The result is that more people are purchasing substantially more music than ever before in history and yet global revenues deriving from these sales have dropped from just under $40 billion in the late 90’s to under $25 billion.
Apple takes up to 30% of the cost of a sale, which is a similar rate of compensation to that of a label that may have spent five years investing in an artist and spending money on marketing and touring.
Content providers, the artists and labels, are giving away their product for an appallingly low rate of compensation and passing the lost revenue directly into the hands of a tech company. Our loss, is their gain.
Apple has amassed a $200 billion cash surplus and is financially the biggest company on the planet. The interesting twist here is that streaming is now killing iTunes. Streaming is seeing year-on-year uptake whilst download sales are declining by approximately $10 million per year.
The promise that all-you-can-eat music would somehow boost sales of downloads is nothing short of a joke and as streaming begins to canabalise platforms like iTunes, Apple have of course been jumping into the next wave of underpriced music.
Our community stands for a lot of things and part of our mission has been to open a more prominent debate that questions the role of technology and Internet disruption.
Multi-billion dollar tech companies make vast profits standing on the back of the content they are given cheaply or for free (your social media posts which are then sold to advertisers for example).
The question we want to raise is this. Is it too late for the industry to turn back? In the same way that there are industry bodies that work to collect royalties for artists (such as PRS), it’s time that we bound the industry together, pulled all content from all platforms and instead built our own not-for-profit distribution methods with the sole aim to getting a fair price for music on any format and distributing that revenue fairly amongst content creators and investors in the music industry. People are loyal to music, not to platforms.
For now however, iTunes is starting to perish and what it’s being replaced with is something even worse. We must fight with all our might to stop it.