updated 09:55 am EDT, Fri September 18, 2009
May put record labels in precarious position
Apple is gradually de-emphasizing music in its business, a policy which could have much broader ramifications, a report argues. Although the company's iPod and iTunes updates on September 9th were nominally themed around music, the company notably placed a stronger focus on games, as well as the video camera added to the iPod nano. Music was only essential in terms of iTunes, with the addition of Genius Mixes, iTunes LP and a new iTunes Store layout.
The App Store is believed to be the current center of Apple's attention, as iPod sales are flattening after years of growth. The problem, says BusinessWeek, is that record labels are now more dependent than ever on Apple, as some 90 percent of US digital music sales are handled through the iTunes Store, and approximately 75 percent of all media players sold are iPods. CD sales are continuing to fall, which means that without Apple's help, the record industry will further shrink.
"Our biggest concern would be if they started resting on their laurels," says an unidentified senior label executive. "We need them to continue innovating."
Apple management insists that music is still important to the company, to the extent that the size of its music team has been increasing for the past two years. iTunes Store downloads, meanwhile, are said to be growing quickly. The company is also opening the App Store to services which compete with iTunes, such as Rhapsody, which does redirect some sales to Apple but also offers rival sales and subscriptions.