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June 10, 2005

iTunes Now Number Two

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Posted by Alan Wexelblat

An unbylined story on CNET points to a study by NPD Group indicating that iTunes is now the second-most popular music download site. Most of the popular sites, including #1, remain free P2P sites. But Napster and RealPlayer store also made it onto the list, indicating a growing parity of interest. I'm glad to see this, and sad that it didn't happen five years ago.

Update: The story has hit a bunch of major media outlets that give fuller coverage. For example, gives the list and some background. The award for "Biggest BS with a straight face" has to go to RIAA CEO Mitch Bainwol who is quoted as applauding "A vibrant, competitive marketplace for digital music is a good thing for both fans and investment in new art."

This from an organization that has made its mark stifling digital music marketplaces (see my comment below), engaging in price fixing, and suing fans as fast as possible.

Comments (4) + TrackBacks (0) | Category: IP Markets and Monopolies


1. Donna on June 10, 2005 12:05 PM writes...

Care to elaborate on why you think it didn't happen then, and why it's happening now (provided it's true)?

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2. Dr. wex on June 10, 2005 1:40 PM writes...

OK, think back five years. Napster is on the ropes and looking for a way out. It offers a deal to the Cartel - make us legit. We'll pay licenses! Had the Cartel chosen to switch rather than fight, it could have had a popular network on its hands with millions of users, client software already installed. All it would have taken was to hook into the ongoing client updates to wrapper a pay model around it.

Why didn't it happen? One word: control. Even today, the Cartel are scared spitless of un-DRMed formats like MP3 and OGG. Back then they couldn't imagine a way to lock down the customer and so they tried to shut down the business. Ever since then, every P2P net has gone asking for licenses and been rejected. The Cartel don't want to license content in ways that might let it out into the big wide world - they want to get paid for you hitting the "play" button.

In the long run they might be right - if they can make that the only model by which you can get content (combine hardware control, refusal to license and a compliant Congress) then they might in the future exceed the revenue they could have had between 2000 and whenever that nightmare future comes to pass.

But if you step back and look purely at the technical and business issues (deliver content, collect revenue, make profit) all the things that iTunes and Napster 2.0 and their ilk are doing today were do-able in 2000.

Why it's happening today is a good question. I think that's a function of publicity and perception. Which boils down to one word: iTunes. Or two words if you also throw in iPod, which has to be the biggest techno-culture phenomenon of this decade.

A nice research project would be go around college campuses and ask "Where can you go to get legitimate downloaded music?" If you get any answer other than "iTunes" at a statistically significant level I'd be stunned. These phenomena have changed more minds than all the Cartel FUD combined. iTunes/iPod are the leading edge of a still-small but definitely expanding wedge.

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3. Donna on June 10, 2005 3:34 PM writes...

Thanks -- the "blink" alone didn't quite satisfy my craving for Wexelblat wisdom.

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4. Derek Slater on June 10, 2005 9:11 PM writes...

FWIW: the NPD report is basically worthless. The report ignored BitTorrent and eDonkey, the most popular P2P services. The report also treated all users equally; doesn't matter if you've downloaded one song on iTunes and one thousand on Limewire, you're regarded as a single user for each. Saying that iTunes is as popular as Limewire on that basis seems just a bit foolish.

The report is nothing more than pre-Grokster decision ramp up.

(see also:

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