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I thought this was a really appropriate article given what we were talking about today in class, the power of Apple, iTunes and the iPod.
Others are starting to challenge their market dominance (75% of all downloads come from iTunes!) and this is what the EU will be looking at in terms of monopoly power.
What do you think? Will Apple survive it all? What parts of the article do you agree with or disagree with?
Also...I am adding this a bit later to the blog...look here for an update on Microsoft in Europe, freer competition means lower prices for all!
9 comments:
This was a great article presenting both the consumer and producer viewpoints. Apple isn't a firm operating under perfect competition nor is it a monopoly-- we haven't gone over oligopolies yet, but I'll try and reason their scenario out. Apple can decide what relationship they want to have with the record label/music industries-- a close relationship would broaden their selection of songs/TV shows and increase the number of consumers. However, the industries demand a price cut, so Apple would lose it s trademark simplicity and control over price-fixing. The second option that the article proposed is the best-- Apple wins, and the networks back down because the need 1) the profits 2) the Apple industry 3) the consumers. Apple is making a huge profit and covering its total costs I assume, so for the moment, it has control. If governments want to come in and regulate them, then there's another story. However, Apple has an easy escape route no matter what happens, for its demand from industries and consumers is so high .
We had already discussed the Apple issue in class, and I think this article further states the huge advantage Apple has with its music downloading program, especially because of its compatability with the widely popular iPod. therefore, Apple has a lot of price setting power within iTunes, and it is naturally conveniant for them to keep the price low in order to attract more iPod buyers who will only be able to use iTunes. while this is an aspect of a monopoly, I agree with Tyler that Apple may be defined as an oligopoly, since there are rivals to iTunes. the only difference is that with the associated programs Apple has with iTunes, it has a great advantage over all other competitors, and therefore ahs more power with TV/music producers. While they may be arguing for more price setting power, I doubt their complaints will be very effective as long as Apple continues to be such a dominant force in the downloading market.
Meanwhile, the other article talking about Microsoft shows how a firm very similar to Apple, which also enjoyed great market power and basically acted as a monopoly, was finally forced to share its business in order to give other competitors a fairer chance. while microsoft, like apple, also thrives on many associated programs which will only work with the specific firm, microsoft does not have a coveted consumer article like the iPod to reinforce its programs. therefore, rival firms were finally able to lessen microsoft's power, at least in europe.
Apple is definitely not a monopoly in the music or entertainment business but it does hold control over the products itself. However, it is possible to get it through other sites or programs similar to Itunes as well as going to the store and getting it. So we're giving the option of buying through Itunes and knowing that it will only work in certain products something they should be entitled to sell, and us the consumers if we wanted to, entitled to buy.
I can understand more the microsoft one and I'm glad they've changed their ways, hopefully it will not be only in Europe although I doubt if I would want a windows that comes precharged witht thousands of programs that do the same things and I will never use... like real media player instead of windows media player.......
Well..i think..Apple would still survive even when all other media companies go against it. However, it wouldn't be at Apple's best interest because Apple wouldn't be able to sell the most recent and popular content. Therefore, I think Apple should just reset its prices. Afterall, like stated in the article, products of different prices aren't hard to use.
Apple would survive if it had other major companies or labels against it. apple has been able to be so popular because it has created itunes the first and easy way for people to transfer their music on to their ipod easily. their are other ways of buying songs or downlading music but the easiest way still to get them in your ipod is through the istore...but if apple looses rights to alot of the major cd releases that universal controls, people may not rely on the istore as much to get their songs and switch to other companies.
i honestly think Apple WILL survive it all...
honestly.. simple...its Apple! haha ;)
the first article says that "option 2: the networks back down" is most likely to occur..and i compeltely agree with this.
like the article says, unless they are willing to put pride over profits as it says. they might continue to search for other alternatives but because of apple's huge market power they can't just ignore it or drop it. its really not profitable for them
i agree with matt when he says Apple would survive if it had other major companies or labels against it. Well...i wouldn't be too sure about it in the long run, but in the short run, as in right now, Apple will definitely survive because of its market of itunes and ipod.
Wow, great article. I think it is good of NBC and other companies to sell music themselves instead of depending on iTunes, but as a consumer, it is conventient to buy all music from one place. I think because iTunes is so popular for consumers it will still dominate. Yes, other companies will sell their products, or like MTV and ABC, allow the public to view episodes free online for a limited time (within the US). There are alternatives, but the world has become dependent on iTunes (because of iPods) thus I don't think any major problems will arise - consumer demand is SO high right now, and appears to keep on going up.
Microsoft and Apple are rivals, but because of the iPods, they have taken two different paths. Microsoft sells more of its program because of all the different choices of computers that use Windows. Apple, on the other hand, depends on sales from iTunes and iPods. These different paths have allowed both companies to grow and I think it has minimized direct competition between the two.
iTunes is entreanched and any effort to remove it will have to fight for any step. I dont see some cheap nock off thats just greedily trying to get the profits iTunes has will be ignored unless they truly bring a great new idea to the whole buisiness. In that case, competition = consumers win.
I agree with what mike said that it is not easy to go against apple, their consumer share is soo high penetrating it would need originality. But since the only people that get itunes (i would think) are people with apple products, as a larger variety of media players come out for example the zune, people might start to look for their music and videos in other places, making itunes less of a monopoly.
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