Today, Apple finally implements the variable pricing that has been promised since label renegotiations in January, but the company must be seething a little that Amazon grabbed all the headlines yesterday with an offer featuring chart-topping MP3s for just 30p.
The deal, featuring artists like Lady Gaga, Kings of Leon, Coldplay and La Roux, will tempt yet more consumers over to Amazon’s DRM-free, easy-to-understand platform from the bloated iTunes ecosystem.
But the funny thing here is that we’re not really talking about music fans. We’re talking about mums and dads, people who buy the occasional track but don’t really keep up with much new music or go to gigs.
The kind of people who buy albums in Tesco, not independent record shops. They’re the people that the record labels successfully marketed CDs to in the 90s, but who are now switching to casual gaming and television since music is so omnipresent in everyday life. They simply don’t need to buy it any more.
Amazon’s strategy seems two-fold. Firstly it wants to steal customers off iTunes – that much is clear by the timing of yesterday’s announcement. It also wants to grow the digital download market, though, by marketing MP3s at people buying CDs, books and DVDs from the site.
Ultimately the whole thing is futile, though, as the general public follows the early adopters from ownership of MP3s to access to vast streaming libraries. Already, pretty much everyone who’s interested in listening to music on their computer has tried Spotify.
Personally speaking, my music listening within the last couple of years has already shifted entirely from my MP3 collection to Spotify and Last.fm. The only time I go back is to listen to obscurer stuff that Spotify doesn’t have, and even then I sometimes don’t bother – I just listen to something Spotify *does* have.
At Christmas, I showed Spotify to my Dad. I’ve never seen him so enthralled by a bit of software – he spent a solid four hours playing with it. Whenever I show it to people are resolutely not early adopters they’re amazed by it too.
That’s why I’m so sure that the pricing war doesn’t matter. As soon as the general public properly discovers Spotify, and when Spotify sorts out its mobile clients, then they won’t need Amazon, iTunes or anyone else. They’ll be converts to “access”, and they won’t go back.
I haven’t exactly hidden my contempt in the past for Doug Morris, CEO of Universal Music Group. For many years, UMG has ridden the coattails of the other record labels, particularly the trailblazing EMI, when it came to digital music. It was with mild trepidation, therefore, that I began to read Cnet’s interview with UMG’s Digital Music head honcho, Rio Caraeff.
There are a number of interesting nuggets of info in the interview – that Android’s driving “a ton” of sales for Amazon MP3, that litigation is not “a definitive or long-term fix” for piracy, and another confirmation of the “tens of millions of dollars” that Rio had previously claimed the label was getting from YouTube.
Most interesting of all, though, is the way that Rio sounds like a guy who’s really got his head screwed on. He speaks very knowledgably about digital music, but the most telling statement is when he says “We’re trying new things constantly. There is nothing we won’t try.” Trying new stuff was one of the central themes of my Six Tenets series about how the next generation of music companies will work. Good to hear someone so high up in the ‘traditional’ industry echo those sentiments.
Cnet’s Rio Caraeff Interview
Great news for those who were specifically waiting for Amazon’s music download service to cross the Atlantic, or who just want to see more competition in the UK online music scene, as Amazon is likely to launch its Amazon MP3 service in Britain later this year.
Though the company has not officially confirmed the service, nor a launch date, it is believed that executives from Amazon have visited London to strike deals with record companies…