{"id":2116,"date":"2009-07-22T16:31:23","date_gmt":"2009-07-23T00:31:23","guid":{"rendered":"http:\/\/lefsetz.com\/wordpress\/?p=2116"},"modified":"2009-07-22T16:31:23","modified_gmt":"2009-07-23T00:31:23","slug":"the-ipod-is-dying","status":"publish","type":"post","link":"https:\/\/lefsetz.com\/wordpress\/2009\/07\/22\/the-ipod-is-dying\/","title":{"rendered":"The iPod Is Dying"},"content":{"rendered":"

Well, not exactly, but iPod shipments fell 7% to 10.2 million.
To quote Tim Cook (via the WSJ): <\/p>\n

\n
\n"We sold 10.2 million iPods which was down from 11 million in the year ago quarter. There were two key reasons for this decline: First, we reduced channel inventory by over 400,000. Second, sales declined by 4% year-over-year."<\/div>\n<\/blockquote>\n

Furthermore:<\/p>\n

\n
"We expect our traditional MP3 players to decline over time as we cannibalize ourselves with the iPod Touch and the iPhone."<\/p>\n

Apple iPhone Sales Surge, iPod Declines<\/a><\/div>\n<\/blockquote>\n

In other words, the iPod is a mature product.\u00c2\u00a0 Demand still exists, but the dramatic sales spikes of years past are history.\u00c2\u00a0 People already have one.\u00c2\u00a0 Or are switching to the iPhone and iPod Touch, which have less storage.<\/p>\n

Remember the space race?\u00c2\u00a0 The larger and larger hard drives in iPods over the years, so you could transport your entire collection? At one point, Apple was selling a 160 gig iPod, now the largest the company offers is a 120.\u00c2\u00a0 The largest iPhone and iPod Touch you can buy is 32 gigs.\u00c2\u00a0 We’re going backwards.\u00c2\u00a0 In more ways than one.\u00c2\u00a0 People need less because they want to carry less, and what they want to carry is oftentimes not even music.\u00c2\u00a0 And music is becoming something you stream…<\/p>\n

Spotify is in front because of its user interface, which mimics iTunes and is almost as easy to use, proving once again, that it’s not about concept, but execution, not about hardware, but software.\u00c2\u00a0 MySpace says you can stream anything…\u00c2\u00a0 Can you find anything? Napster and Rhapsody sport ancient interfaces.\u00c2\u00a0 As for Web-based competitors, it appears we’re moving towards standalone apps…<\/p>\n

So, Apple is winning the hardware race because of software.\u00c2\u00a0 You can make a hand-set that looks like an iPhone, but it won’t work like an iPhone (even the Pre, which Apple excluded from synching with iTunes last week).\u00c2\u00a0 So, we can see that Apple is one step ahead of everybody else, because their products work, in a way that their competitors’ don’t.<\/p>\n

But what’s most interesting for the music business is that rights holders are always arguing about the past, losing valuable revenue while the future arrives.<\/p>\n

In other words, decline of iPod sales is a harbinger of the reduction of P2P music acquisition.\u00c2\u00a0 True, the iPod market is saturated, but why do you need a bigger one if you don’t have to carry around your music?\u00c2\u00a0 The labels could have licensed P2P, beginning with Napster, and reaped all that revenue before the window on file-trading started to close, entering its sunset years like 8-tracks and cassettes before.\u00c2\u00a0 To license P2P now is akin to regulating CB radios.\u00c2\u00a0 Huh?\u00c2\u00a0 Time has marched on, the behavior has been eclipsed. We’re moving to a streaming world.\u00c2\u00a0 So best to license streaming apps and try to gain as much revenue as possible, before the next technology arrives.<\/p>\n

It looks like streaming\/on demand is going to have a long run.\u00c2\u00a0 It’s just a matter of how the music is delivered.\u00c2\u00a0 So play now, earn now, or forever leave that money on the table.<\/p>\n

Going back to the iTunes Store…\u00c2\u00a0 Instead of raising prices, the labels should have a going out of business sale!\u00c2\u00a0 Dropping prices to ten or fifteen cents, loading customers up on files before they realize they don’t need them anymore!<\/p>\n

Apple is no longer dependent on the major labels.\u00c2\u00a0 The App Store is driving the sales of their next technology, i.e. iPhone\/iPod Touch. Apple moved on before the previous technology peaked.\u00c2\u00a0 This would be like the labels embracing file-trading before CD sales tanked. But we know that didn’t happen…<\/p>\n

The tech world moves very fast.\u00c2\u00a0 Today’s hit is tomorrow’s rubbish.\u00c2\u00a0 Resurrect AOL and Yahoo?\u00c2\u00a0 Revive MySpace?\u00c2\u00a0 Are you kidding? That would be like everybody who got a divorce getting back together with his old spouse.\u00c2\u00a0 And that ain’t gonna happen.\u00c2\u00a0 You don’t go back, you move on!<\/p>\n

As for revenue generation of streaming services…\u00c2\u00a0 Fascinating question.\u00c2\u00a0 The key is to make everyone a customer, charging a low price for everything.\u00c2\u00a0 Still, the market for recorded music may never hit its old heights.\u00c2\u00a0 But that doesn’t mean that the music business won’t grow.\u00c2\u00a0 Will Page at PRS says it already has! <\/p>\n

\n
Music industry back on right track, says report<\/a><\/div>\n<\/blockquote>\n

<\/p>\n

<\/p>","protected":false},"excerpt":{"rendered":"

Well, not exactly, but iPod shipments fell 7% to 10.2 million.To quote Tim Cook (via the WSJ): "We sold 10.2 million iPods which was down from 11 million in the year ago quarter. There were two key reasons for this decline: First, we reduced channel inventory by over 400,000. Second, sales declined by 4% year-over-year." […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,2,8],"tags":[],"class_list":["post-2116","post","type-post","status-publish","format-standard","hentry","category-apple","category-music-business","category-technology"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p96vPs-y8","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/2116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/comments?post=2116"}],"version-history":[{"count":1,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/2116\/revisions"}],"predecessor-version":[{"id":2117,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/2116\/revisions\/2117"}],"wp:attachment":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/media?parent=2116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/categories?post=2116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/tags?post=2116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}