Nekesa Mumbi Moody
When Apple launched its iTunes music store a decade ago amid the ashes of Napster, the music industry — reeling from the effects of online piracy — was anxious to see how the new service would shake out.
“The sky was falling, and iTunes provided a place where we were going to monetize music and in theory stem the tide of piracy. So, it was certainly a solution for the time,” said Michael McDonald, who co-founded ATO Records with Dave Matthews and whose Mick Management roster includes John Mayer and Ray LaMontagne.
The iTunes music store became much more than a solution; it changed how people consume music and access entertainment.
It’s not only music’s biggest retailer, it also dominates the digital video market, capturing 67 percent of the TV show sale market and 65 percent of the movie sale market, according to information company NPD group.
Its apps are the most profitable, it has expanded to books and magazines, and it is now available in 119 countries. Last week, iTunes posted a record $2.4 billion in revenue in first-quarter earnings.
But iTunes faces renewed scrutiny on how it will continue to dominate in the next decade — or whether it can.
Competition from subscription services like Spotify and Amazon.com, Netflix, and Hulu means iTunes will likely need to reinvent itself.