Is iTunes helping the music industry—or destroying it? That's the dramatic question we will answer for you in this post. Itunes is the single largest retailer of music in the US, period. It sells nine out of every ten digital song downloads in the country. And since it helped put the Tower Records of the world out of business, lots of artists think there's nowhere to go except iTunes. But how much money are (even famous) bands really making off all those 99-cent singles? Here's, uh, one perspective:
Irving Azoff, the manager of numerous high-profile acts including the Eagles, says that a few years ago he presented the band with a financial analysis showing that their royalties to date from iTunes sales were far lower than anyone expected. Guitarist Glenn Frey did some back-of-the-envelope math of his own. "His comment was that it amounted to 39 minutes on stage in Kansas City," Mr. Azoff recalls with a chuckle.
Ha, and you know they don't pay much in Kansas City! Now there's a budding backlash, as some record labels look for ways to return to the days of selling entire albums, which are much more lucrative than those singles that iTunes mandates. Kid Rock managed to sell 1.7 million copies of his latest album without iTunes, on the strength of his godawful execrable derivative single, "All Summer Long." Christ. Of course, you shouldn't forget who the main alternative to iTunes is: Wal-Mart, where rock and roll lives. So here's what will happen: iTunes will continue to dominate, but slowly lose market share to other players in the digital music space. Downloads are here to stay. Wal-Mart will continue to dominate the market for people who desire CDs of horrible, trite songs like "All Summer Long." When the CD market totally dries up, Wal-Mart will figure out how to dominate the digital space and become a major competitor with iTunes. One day far in the future, some brilliant young person will figure out how to translate the business sensibility that made indie record stores great onto the internet. Till then, bow to iTunes and like it. [WSJ]