Apple Of The Music Industry's Twitchy Eye

Steve Jobs wants to wipe that smile off your face.

You might have seen the news earlier this week that iTunes is now the second-largest music retailer in the U.S., behind the almighty Wal-Mart. The research firm NPD Group announced that Apple's digital music store has jumped ahead of Best Buy to take the No. 2 slot, just a few months after the singles-centric site blew past Amazon's album-oriented online store to move into third.

NPD Group says it's only a matter of time before iTunes becomes top dog - and that the time will probably come in 2008. (Kinda like 1984 all over again, no?)

Now, nobody in their right mind would bet against Steve Jobs. But if you're not in the right mind, the Antigua-based gambling site, Bodog, is offering a prop bet in which you can wager that Apple's total domination of the music space will not, in fact, take place before the clock strikes 2009. You can also wager on an iTunes win by year's end, but the betting line isn't great: -240 (meaning you have to bet $240 to win $100) compared to +165 (bet $100 to win $165) for no.

(Note: We At The Washington Post do not condone gambling, even if David has been known to lose a little music-based wager.)

Meanwhile, NPD Group also said that about 1 million people stopped buying CDs in 2007. Shocking, I know.

By J. Freedom du Lac |  February 28, 2008; 11:00 AM ET Music Business
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The issue with Apple is whether the labels will let it happen. Right now Apple is limited--as compared to the Amazon MP3 store--because the labels are playing hardball. They want more control and variable pricing, and they're refusing to make deals with Apple to get DRM-free ("iTunes Plus") tracks into the iTunes store.

If Apple can reach an agreement with the labels, the sky's the limit--but if they are stuck with inferior product with DRM, that will be a limit on growth.

Posted by: Dirty Davey | February 28, 2008 2:22 PM

@Dirty Davey

Actually I don't think it'll be much of an issue. iTunes sales are still growing even though the labels are playing hardball as evidenced by the fact that they just took #2. The labels will probably give long before Apple does, but it doesn't matter since they make all the real money and hardware sales and there's nothing stopping someone from playing songs from Amazon's store on the iPod. In other words, it's a clear Win-Win for Apple.


Posted by: Sebastian Lewis | February 28, 2008 3:29 PM

We need more games.

Posted by: Myah | February 28, 2008 3:51 PM

The labels are crazy not to give in to Apple. All Apple has to do to sell even more songs is to establish iTunes stores in more nations than the 21 it has now, and mainly in the population-rich countries of Asia.

Once 21 more nations sell their own national songs on Apples' iTunes stores, the labels will have to give up their sorry, petty schemes.

Posted by: gurly | February 29, 2008 9:49 AM

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