Why DID Apple Create the iTunes Music Store?

by Dave in , ,

Today I was reading the articles and comments over at our site, iPodObserver, and the comments on one story in particular made me start thinking about this question. Did Apple create the iTunes Music Store (iTMS) to make money? Perhaps. But all signs point to them making less than a nickle per song. Granted, if I had a nickle for every song purchased, my blog would look a LOT nicer. However, one wonders if they did it more to (a) prove a point that this *is* the direction the business is going and (b) placate the labels.

Placate the labels, you ask? Yep. Granted, they had to come to that table kicking and screaming (and, indeed, are kicking and screaming again now), but think about this: it's no secret that Apple makes their money off of hardware sales. iPods, Macs, you-name-it. Now think about this: If you buy your songs from the brick-and-mortar record store, or if you buy them from the iTMS, or if you copy them from your "friends" on your favorite darknet or public peer-to-peer network of choice, Apple's still going to sell you an iPod to play them. They don't care where you get it from -- just put it on one of *their* iPods, and you're good (or, at least, Apple's good!). By getting into bed with the record labels and offering a way for people to download songs legally, Apple has given the labels very little ground to stand on as Apple trudges forward selling every song-pirate their favorite MP3 player.

Food for thought.

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