I tunesfuture1

Apple iTunes

The Future and the Age of AccessKraetzche, “the fortune teller and the crystal ball” July 21, 2010 via Flickr, Attribution-NoDerivs 2.0 Generic.

(Rifkin, J. 2001)

“In the new era, markets are making way for networks, and ownership is steadily being replaced by access”

iTunes: The Future and the Age of Access

“In the new era, markets are making way for networks, and ownership is steadily being replaced by access”Moreover……

(Rifkin, J. 2001)


“The top fifth of the world’s population now spends almost as much of it’s income on accessing cultural experiences as on buying manufactured goods and basic services”(Rifkin, J. 2001)


And….

So what does this mean for iTunes Store and what are they doing to adapt to these new market conditions of the network economy?


And….

How are they adapting to the new ways people are consuming media i.e. their “cultural experiences” in a network economy?

So what does this mean for iTunes Store and what are they doing to adapt to these new market conditions of the network economy?


The future is never certain, but these questions are answered in part by Apple’s recent acquisitions and product releases….


“Apple Plots Reboot of iTunes for Web”

(Kane, Y.I. & Smith, E., 2009)


Swamibu, “clouds” July 21, 2010 via Flickr, Attribution-NonCommercial 2.0 Generic

Late 2009: Apple buys La La – a struggling streaming music service for $85m.

Pundits predict: A move to “the cloud” for Itunes store and playlists using La La technology and possible subscription model.

Web based ITunes (due 2010)

No more ITunes client on PC which means access to music from anywhere (as long as there’s internet access).(Kane, Y.I. & Smith, E., 2009).


“The proposed changes would represent a fundamental redefinition of what it means to own a song, movie or other piece of media—shifting the emphasis from possession of a physical disc or digital file to the right to access content.”

(Kane, Y.I. & Smith, E., 2010).


It appears that Rifkin was accurate in his predictions back in 2001: The notion of ownership in a network economy would become obsolete.

“ownership is simply too slow an institution to adjust to a nanosecond culture”

It has just taken a long time for technology advancement to be at the stage that it can accommodate this change (i.e. widespread broadband).(Rifkin, J., 2001).


So in a media environment where there is no money in ownership and production and duplication is easy and accessible, making money is difficult…

…what are Apple’s plans to continue to make a profit in this environment?

Abramovitz & David 2001, cited in Flew, 2008

.


This is one:

“Apple Sees New Money in Old Media: Steve Jobs's Tablet Device Looks to Repackage TV, Magazines, Just as iPod Changed Music Sales”.


(Kane, Y.I. & Smith, E., 2009).

April 2010: IPAD, Apple’s tablet computer released.

Apple in negotiations with media companies to provide their content via the iTunes store to be accessed via devices such as the iPad.

Apple’s emphasis to be subscription services to quality content accessed wirelessly (television, magazines, newspapers) - as opposed to Google, who allows free access to bad quality content via YouTube.

(Kane, Y.I. & Smith, E., 2009).


This caters for the changing way in which people are accessing media, in that consumers will be able to access what they want, whenever they want, from where-ever they want; especially if iTunes Store and content is accessed via the cloud..

..and of course, makes money for Apple.


.

Here’s another way Apple plans to make money.


.

Advertising


“Is Apple's 'iAd' Steve Job's 'next big thing'?”

(Hartle A., 2010)


(Hartley A., 2010)

March 2010 – Apple purchases Quattro (mobile advertising platform).

ITunes purchase information used to tie in ads to purchases and offer valuable information for advertisers.

Mobile ads – adverts based on location.

Apple to go head to head with Google who recently purchased mobi-ads for mobile advertising on Android devices.


So, we can see no sign that Apple iTunes is going to relinquish it’s leading market position in the near future, given the proposed new business models, products and acquisitions…..


Moreover, Apple will hold on to it’s leading edge if it continues into the future what it has learnt from the past:


Apple has understood the fundamentals of success in the network economy as espoused by Kelly (1997) and de Man (2001):

Constant innovation that requires the acquisition of companies whose technology is needed for that innovation.

The formation of partnerships and allegiances with crucial stake holders (i.e. media companies and record labels) The need to adjust quickly to market changes and consumer preference and stay ahead of the competition using innovation, acquisitions and allegiances


Which, so far has meant:

“Instant Scalability”: The ability of iTunes to meet the market demand in almost no time i.e. the mobile app and music market.

And…

“Positive Network Effects”: The global penetration of the iTunes store, and Apple hardware, which means sellers have the broadest exposure and audience to their product i.e. music and other media.

(Leibowitz. S.J., 2002)


Evelynishere, “first place” July 21, 2010 via Flickr, Creative Commons Attribution.

All of which has resulted in…..

Winner Takes All

References

Flew, T. (2008). Introduction to New Media. In New Media: An Introduction (3rd ed., pp.1-37). New York: Oxford

Grover, R. & Satariano, A. (2010, July 1) The Fall of Music Downloads. Retrieved June 8, 2010, from Bloomsberg Businessweek (online): http://www.businessweek.com/magazine/content/10_28/b4186037467816.htm

Hartley, A. (2010, March 27) Is Apple’s ‘iAd’ Steve Job’s next big thing’?. Retrieved May 24, 2010, from techradar.com: http://www.techradar.com/news/computing/apple/is-apple-s-iad-steve-job-s-next-big-thing--679917#ixzz0sDGBFLzX

Kane, Y.I. & Smith, E. (2010, Jan 22) Apple sees new money in old media.. Retrieved June 8, 2010, from The Wall Street Journal (online) http://online.wsj.com/article/SB10001424052748703405704575015362653644260.html?mod=WSJ_Tech_LEADTop

Kane, Y.I. & Smith, E. (2009, Dec 9) Apple Plots Reboot of iTunes for Web.. Retrieved June 28, 2010, from The Wall Street Journal (online) http://online.wsj.com/article/SB126040631831584643.html

Kelly, K. (1997, September). New Rules for the New Economy: Twelve Dependable Principles for Thriving in a Turbulent World. Wired. Retrieved May 23, 2010 from: http://www.wired.com/wired/archive/5.09/newrules_pr.html

Leibowitz, S.J. (2002). Basic economics of the internet from Re-Thinking the Network Economy: The True Forces that Drive the Digital Marketplace. New York: Amacom. (pp. 9 - 24). Retrieved June 12 from e-Reserve. Curtin University.

Rifkin, J. (2001). Entering the age of access and When markets give way to networks from The Age of Access: The New Culture of Hypercapitalism, Where all of Life is a Paid-For Experience. Tarcher Penguin Putnam. (pp. pp 3-29, ). Retrieved June 8 from: Curtin e-Reserve.

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