The music industry has undergone tremendous changes; the whole business model has been transformed and the internet has taken over each and every aspect of the business. Old competencies become irrelevant while it has become a necessity for the businesses to quickly adopt the new ones. The need for A&R staff has been eliminated by the concept of the MP3 to make the music in the digital format. Similar to the other businesses, the elimination of the barriers to entry has given rise to more competition and opened up more chances of innovation in the industry. The compilation and distribution of music has switched from CDs and tapes to MP3 through the internet. This has brought the biggest threat ever: there is no concept of restriction on the distribution of music through internet. The sharing and free distribution has become one of the biggest challenges. The peer to peer networking has been violating the copyrights of the music industry. Apple through its app iTunes has offered a way to legalize the music downloading and helping save the industry.
- Apple has expanded its approach by adding in new business models while retaining the old ones. The computer hardware and software integration is the longest line of the Apple’s business. The concept behind the integration is the belief of equal usefulness of the hardware and the software. Through the full integration of hardware and software like iPod and iTunes, the company has focused on the usability and the high quality of the product/service. The iTunes store is the main e-commerce engine for consuming media through the Apple devices (Noren, 2013). It has expanded from merely music to include the apps and books. It is an innovative digital model for business. The merger of iPod and iTunes is the merger of technology, entertainment and business. It has made significant impacts to the music industry. It is the most innovative medium for legal distribution of digital content. It has applied the three strategies of Porter where it gained competitive advantage by being a differentiator, retained and attracted new customers by being the cost leader, and targeted niche markets by focus strategy to build upon partners to create the digital content. The coupling of iPod and iTunes has detrimental effects on the industry and made Apple grow into a digital leader. By adopting technology, the company has created more flexibility to its product line (Noren, 2013).
Executive Decisions
The iTunes Store has completely transformed the way music was consumed. The store has made legal purchase of the digital music very easy. But the biggest challenge is that the competition is increasing and what strategy would iTunes adopt to retain the top position in the digital entertainment (Moody, 2013). How would it reinvent itself when other subscription services are emerging? ITunes had given consumers the power to purchase what was earlier being illegally captured. The future definitely includes more hacking wars and some licensed products for the consumers. The store has changes the world and reinvigorated the music business (Herr, 2013). It must continue to build on the earlier model while looking for ways to cut the cost and reinvent the store to add value to user experience.
References
Herr, J. (2013). Is there a future for apple's iTunes store? [Online] 1st Feb. Retrieved from: http://theweek.com/article/index/239617/is-there-a-future-for-apples-itunes-store [Accessed: 8 Mar 2014].
Moody, N. M. (2013). ITunes celebrates a decade, faces new challenges. [Online] 24th Apr. Retrieved from: http://news.yahoo.com/itunes-celebrates-decade-faces-challenges-142014995.html [Accessed: 8 Mar 2014].
Noren, E. (2013). Analysis of the apple business model. [Online] 18th Feb. Retrieved from: http://www.digitalbusinessmodelguru.com/2013/02/analysis-of-apple-inc-business-model.html [Accessed: 8 Mar 2014].
