
Apple's clearly set itself apart as the dominant medium for music of this generation. The seemingly unstoppable duo of iPod and iTunes, combined with the rise of Mac computers and now the iPhone, has seemed to given Apple all the momentum, much like Sony had with the Walkman and Casio had with the tape deck. But based on my experiences with the new Amazon MP3 service, I can say it has all the tools to topple Apple's stronghold, and, if successful, can also put Amazon as one of those Google-like juggernauts of the Wild Wild Web.
Even though iTunes remains the most dominant music playing program, some have been frustrated by its restrictions. Universal dropped its contract with Apple, and even though people predominantly listen to songs on iTunes, the inflated 99 cent per song price tag and the annoyance of DRM-protected music has led to continuing piracy at uncontrollable levels. Until recently there wasn't a better option for legally downloading MP3s, but Amazon has now provided a service unlike anything we've seen since the original Napster.
Yes, two major label corporations have still not signed on, and yes, Amazon doesn't have the software to support its store like Apple does, but the benefits of Amazon's MP3 service are strong enough to overcome this. For starters, the 89 cent per song price tag may not seem like that much of a difference, but in the minds of consumers, it makes a big deal. Daniel Kahneman won a Nobel Prize in 2002 for showing that a dollar is a dollar is a dollar does not apply in consumer's decision making, and anyone who's attended a class with Allen Sanderson knows that saving 10% per song makes a huge difference in consumers' eyes, even if it doesn't in economists'. Why would anyone pay 10 cents more for the same song that can be downloaded just as easily? I don't think iTunes' name carries that much weight.
The most significant difference, of course, is the DRM-free tracks. Just think about how often you've been nuisanced by a track or album you downloaded from iTunes: you can't send it to your friends, you can't put it on more than 5 computers, and good luck trying to copy it to an mp3, the format which podcasts and blogs almost universally require. Amazon, however, is not DRM-protected, and when you download an album, it simply gives you an mp3, no fuss. My first purchase on Amazon MP3 was Elastica's self-titled debut. I send it over AIM to my fellow Wire-loving friend to see what she thought of the blatant stealing of the riff from "Three Girl Rhumba" in "Connection." I had no problems whatsoever in the whole deal. Imagine what hoops I'd have to run through to do that if I downloaded the album on iTunes.
As for the compatibility with software, the interface is remarkable adept. The program you download has a big, obvious button to direct you to the Amazon store, and the downloading process was fast and efficient, actually smoother than the stop-start iTunes downloading. If that wasn't enough, the interface automatically installed an Amazon Music folder in my MacBook Pro's music folder, right next to iTunes Music. It added the tracks to iTunes automatically. So if there's no real inconvenience with Amazon's MP3 site, and it offers all those advantages over iTunes' store, there's every reason to think iTunes will face a serious run for its money.
Over at the Freakonomics blog, Stephen Dubner held an excellent quorum on the future of the music industry, during which Fredric Dannen had this to say:
In this case, the format is more convenient both in terms of usability, price, and product. It may even cut down on piracy a little. Steven Levitt is all about the effectiveness of moral incentives, and I do believe that if all things were equal, users would choose the legal track over the illegal track. Now that Amazon is providing extemely convenient, relatively cheap, and much easier to use audio files, it may sway some to download songs legally instead of resorting to BitTorrent.Two decades ago, I was interviewing David Geffen for Hit Men, and he offered a warning about what he saw as a grave threat to the record industry: digital audio tape. If record companies started issuing albums on D.A.T., Geffen said, they would effectively be distributing their master tapes, “obviating the need for catalog.” At the time, Geffen’s admonition made sense; but D.A.T. never caught on with the consumer. The failure of D.A.T. got me thinking, and before long I believed I had discerned something about the consumption of recorded music — something startlingly obvious that has somehow eluded the record industry throughout its history, and led to the industry’s irreversible decline.
My epiphany, if you want to call it that, was simply this: consumers of recorded music will always embrace the format that provides the greatest convenience. No other factor — certainly not high fidelity — will move consumers substantially to change their listening and buying habits. The single exception to this rule was the introduction of two-channel stereo in the late fifties.
Let me state this more clearly, by example. When the long-playing record (LP) format was introduced by Columbia Records back in the late 1940s, the industry as a whole resisted it, and many predicted it would never take off because 78s sounded better. Without question, early LPs did not sound nearly as good as 78s. But given the choice of listening to all of Beethoven’s Ninth Symphony on two sides of one record versus sixteen sides of eight records, the consumer opted for convenience and simplicity (not to mention less shelf space).
The industry also resisted the audio cassette. Who in their right mind would prefer a format with an ever-present hiss over the pristine sound of an LP? The answer: nearly everybody. Cassettes were much easier to handle than records; they didn’t scratch, and you could listen to them in your car, or while walking or jogging.
Starting about twenty years ago, the CD took off like a rocket, burying both the LP and the audio cassette in a few short years. At that time, the CD was the last word in simplicity and convenience. I remember meeting an audiophile at a record-industry convention in the late 1980s. The popularity of the CD appalled and befuddled him. Couldn’t people hear that digital sound was cold and harsh compared to the warm, luxurious sound of an LP? Sure. But most consumers of music are not high-end audiophiles. Now you could hear all 74 minutes of Beethoven’s Ninth Symphony on one side of one disk.
I myself am something of a music nut. I cannot get through a day without listening to music, and my personal collection of recordings is enormous. By the early 1990s, I longed for a format even more convenient than the CD. And, based on my own listening habits, I was pretty sure I knew where we were headed. In short, I wanted to be able to run my music library from my home computer, and dispense with disks altogether. What I did not foresee was the advent of MP3 compression. As soon as MP3s hit the scene, I embraced them ecstatically. I was the first person I knew to own a Diamond Rio, the first portable MP3 player.
In 1999, I wrote an editorial for the New York Times predicting that MP3 was an unstoppable force that would destroy the oligopolistic power of the record industry. This paper did not believe me; the editorial ran instead in the Los Angeles Times.
It was an easy prediction to make. You can always count on the record industry to cling to the past, and to fight innovation. (Apart from resisting the LP, the cassette, and the CD, the industry also fought MTV.) The industry could have adopted and embraced MP3 as the new dominant format, had it understood why it was unstoppable. But the business’ failure to understand has been striking for its persistence. By the time Napster hit the scene, the industry had a Hobson’s choice: accept MP3, or die.
We all know what happened next.
If Amazon MP3 does take off, it will give Amazon a prominence they've never yet achieved, even with all their succes so far. They've always been a dominant retailer, but they've never been the dominant retailer in anything (I'd argue Barnes and Noble and Borders, still surpass them in the book market). If they get ahold of something as prominent and as rapidly growing as MP3 sales, it's easy to see Amazon eventually creating their own iTunes and iPod, and reinvent themselves just like Apple has over the last 5 years. They've always been one of the more innovative prominent websites, and the sky's really the limit.



