Feeds

Microsoft moves in on music downloads

No Apple turnover, this time

  • alert
  • submit to reddit

Bridging the IT gap between rising business demands and ageing tools

Analysis The press say this is Microsoft IBM all over again from the 1980s with only one result possible. We're not so sure.

Everything that happened in online music seems to be related this week, starting with Apple owning up to an astonishing 2m iPod sales in its last quarter in the results it launched last week. The results were enough to catapult Apple's stock market value from $15bn to $17.8bn, a 17.5 per cent increase in just a couple of days trading. A year ago Apple was hovering around $8.8bn in value and it has now more than doubled this.

The stranglehold it has on this market is now what analysts everywhere are debating, as multiple offerings came out this week and the long awaited Microsoft response with its MSN music service finally saw the light of day.

Apple accompanied the results by saying that it has now sold 150 million song downloads and is now on an annual run rate of 200m songs. US researcher the NPD Group has issued a report this week saying that Apple iTunes is delivering 70 per cent of all music downloads.

This compares with Napster, which accounted for 11 per cent, and RealNetworks, Musicmatch and WalMart, each with a six per cent share.

But that's not all that NPD is saying this week. It turns out that it has tracked the gradual reduction in the use of MP3 files. We suppose that this was inevitable as companies like Apple, Microsoft, RealNetworks and Sony all push their own music formats when they sell music online. However all of these support MP3 files as well because it remains 72 per cent of all music on PCs, says NPD, down from 82 per cent a year ago.

Hard-drive share

"People are still getting MP3s and putting them on hard drives but are deleting them at a rate faster than they're acquiring them," said NPD's MusicWatch Digital.

NPD says that so far the big winners have been the formats backed by Microsoft and Apple, each of which has gained about five per cent 'hard-drive share' in the past year. The project surveys the hard-drive contents of 40,000 different people through an online panel in the US only.

NPD researchers estimate that there was a net loss of about 742m MP3 files from US hard drives between August 2003 and July 2004, despite people acquiring billions of songs from file-trading networks and their own CDs. The number of consumers paying for downloads reached a peak of 1.3m in April 2004 and since then, NPD says, the number has actually been going down, and is now at just 1m users per month.

NPD said that this downturn coincides with the end of promotional periods offered by several of the online services, in which consumers were offered trial price incentives.

All of which means that there is still an awful lot to achieve in online music services, and the feeling that NPD tries to give is that about half of the new files have been Windows Media, and half Apple's AAC. The interpretation that could be put on that is that Microsoft and Apple are running neck and neck. Which is of course not true as Microsoft has only just switched its service on.

What has been happening is that most competitors to Apple are smaller, less well-funded and less well-thought out efforts. When that's the case you have to take the hardware, DRM and software that's already available to you in order to create a new service quickly and cheaply.

So this is Apple, versus the rest (on Windows), versus piracy. And NPD would have us believe that Apple has gone so far, but may go no further.

The press has voiced a very similar story this week as Microsoft orchestrated a series of announcements designed to plant that very idea.

Application security programs and practises

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.