Clout of iTunes

by Rob Horning

9 March 2007


I’m not one who misses the record store. I don’t worry that they are disappearing or miss serendipitous moments of discovery while flipping through the racks or the helpful recommendations from my friendly and knowledgeable record-store clerk or any of that. Because I grew up in the suburbs, my early record store experiences took place not at some indie store out of High Fidelity but in Listening Booth and Wall to Wall Sound, mall stores where the cashiers were no more knowledgeable about music than the sweater folders at the Gap. These stores had a sparse, random stock once you moved beyond whatever the big record companies were paying the chains to promote, so you had to dig pretty deep into the store, past the promo posters and mock album covers and cut-outs (like the Debbie Harry Koo-Koo stand-up in the mall scene from Fast Times at Ridgemont High) to find anything out of the ordinary, and then you would have to buy it typically with absolutely no idea of what it would sound like. Now, of course, you don’t have to put up any money to take that kind of chance on new music. I can’t decide if this lack of investment makes it easier or harder to get into new music. It does mean that I generally have a better reason to make the effort than “I just bought this, I have to get my money’s worth.” I think I heed friends’ recommendations and the general buzz a little more than I used to, but that might just be a product of being older and having less ego invested in being a listening pioneer, in fancying myself the Magellan of music or something.

Anyway, this WSJ article, about how the iTunes store brokers the space on its homepage, starting me thinking about this. With iTunes selling upwards of 5 million songs a day (!) what it chooses to promote on its page can drive sales, and record companies want a piece of that action. Record stores used to charge labels for favorable placement, which led to the annoying displays and the annoying music you would hear played there. But iTunes alleges not to play that game:

Apple says it shunned pay-for-placement—as have online rivals including RealNetworks’ Rhapsody—to provide unbiased music recommendations. Eddy Cue, the Apple vice president who oversees iTunes, says the company hopes to recapture some of the spirit of independent record stores, when clerks would give uncompromised tips on promising performers. “That for us was kind of gone in the new retail environment,” Mr. Cue says. Customers used to believe that advice on music “was coming from someone who really liked it versus someone who was paid to say they liked it.”

Accordingly iTunes has “music editors” on staff to curate the store’s main page, and they limit the use of their retail clout to get exclusive material from prominently featured artists or to drive prices down on artists they’d like to feature.

That may sound pretty progressive of Apple until you realize that unlike the Listening Booths of yore, it doesn’t need to make money selling music—it sells DRM’d songs to force you to keep buying iPods, which have become the company’s cash cow. And the fact that iTunes is a virtual monopoly as far as legit online-music sources go, they have a concentrated amount of influence that can only be abused. It’s the exact opposite of the local music markets that once flourished and spawned idiosyncratic regional hits, the sort of stuff that ended up on the Nuggets compilation. Instead iTunes can break whoever it wants globally. Of course, iTunes has an advantage that traditional retailers could only garner through the laborious construction of outlets across wide geographical areas: it can manage the scale on which it operates on almost a real-time basis, targeting its homepage to different demographics depending on other data it can collect or apply as you log in. So the store can be local to the tastes exhibited in your own iTunes library or can be international or it can blend these in any number of ways, changing to suit trends in retailing as they evolve. It can be a mom-and-pop store, a hipster enclave (with its “editors” playing the role of record-store denizens, supplying cutting edge content), or a mall chain or a big-box store, depending on your mood or its prerogative.

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