How Come ITunes Sales Haven’t Hit a Wall?

by philg

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 couldn’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.

Let’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. That’s a $5,200 contribution to Steve Jobs’s Gulfstream fund (will pay for about one hour of fuel and overhaul reserves). These are downloaded to the consumer’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 don’t have a backup regime in place, this $5,200 investment in Apple’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, you’d think that word would get around and people would stop paying big money to listen to music while they pick cotton on Steve Jobs’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.