Can Continue Its Music Monopoly in 2010?

Jan 12, 2010, 13:01 ET from Comtex IT

NEW YORK, Jan. 12 /PRNewswire/ -- On January 9th, 2001, Apple Inc. introduced iTunes to the world.  In 9 years of existence, Apple's iTunes has sold over 8 billion songs, accounting for 70% of all worldwide music sales - thereby making the site the largest online music retailer.  

Despite the outrageous numbers, 2009 was not a good year for music sales in general, and/or for Apple's subsidiary in particular.  The iTunes online music sales have dropped steadily, specifically since the company raised prices from $0.99/song to $1.29/song leaving many to speculate that the music site may lose their global monopoly by the end of 2010 to smaller sites offering the same exact music for a fraction of the cost.      

As an example of potential competition, has become an increasingly popular alternative for its unusually low prices - selling individual songs for 19cents while full-albums average around $1.50 - with additional discounts and price incentives for multiple purchases., a buy music online site, has been on a mission to compete with iTunes & Napster by providing consumers an affordable alternative by offering the same exact music for a fraction of the cost.  "Why pay $1.29/song when you can download the same exact music for $0.19 cents," asks Peter Richards, a DJ working in the NY party circuit.

According to TunesPro management, "the low prices are what originally what aroused clients - but the DRM-Free content that is 'delivered on demand' allowing consumers to playback their music on all tangible formats (iPod, iPhone, Laptops) is ultimately what keeps clients returning."

Official numbers released last week by Nielsen SoundScan report indicate that the total sales for digital and physical albums in 2009 declined to 373.9 million units, a 14% reduction from the 2008 fiscal year.  Overall, the numbers are less than half of what they were in 2000 — when album sales peaked at 785.1 million units.  

The media industry's "question of the year" asks if lowering prices in 2010 will ultimately increase both music sales and profits, and if so what does that mean for sites like iTunes who charge $1.29 per song against sites like who sell the same exact music for $0.19?  


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