How Come ITunes Sales Havenâ€™t Hit a Wall?
Saturday, September 12, 2009 at 12:16 AM EDT
Virtually every product sold in America that requires consumers to have expert computer system administration skills has experienced rapid growth among early (geeky) adopters and then hit a sales wall. Even VCR programming was something that most Americans couldnâ€™t be bothered to learn. The first million people who bought VCRs read the manual carefully and time-shifted all of their favorite shows. The next 200 million bought them, lived with the flashing 12, and rented tapes.
Letâ€™s consider iTunes. A music-loving consumer purchases 400 albums worth of music from Apple. Assume there are 10 tracks per album at a cost of $1.30 per track. Thatâ€™s a $5,200 contribution to Steve Jobsâ€™s Gulfstream fund (will pay for about one hour of fuel and overhaul reserves). These are downloaded to the consumerâ€™s $3,000 desktop Macintosh and used to feed his home music system. The hard drive dies. If our consumer is one of the 80 percent of home computer users who donâ€™t have a backup regime in place, this $5,200 investment in Appleâ€™s low-quality compressed music files evaporates. (Of course, our music lover might have a copy on an iPod, but in order to protect the recording industry from its consumers, Apple software prevents him from copying the data back from the iPod onto his new $3,000 Macintosh.)
After a few such incidents, youâ€™d think that word would get around and people would stop paying big money to listen to music while they pick cotton on Steve Jobsâ€™s plantation.
How could a product that requires home computer users to be expert sysadmins continue to enjoy expanding sales? Especially as an increasing number of consumers have migrated all of their data onto cloud-based services, such as Hotmail, Flickr, Google Docs, etc.
This article originally appeared on Philip Greenspun's Weblog.