iPod Turns 5 Today & What It All Means

What a difference five years makes. Apple was in danger of fading to black. The major labels were fat with dollars gained by fans converting collections to CD and all the mega-hits those $’s could buy.  Five year’s ago we were all just starting to take this file sharing thing seriously.

Then came the iPod. It gave the music industry hope.  Perhaps this sexy device and it’s companion iTunes could usher a profitable move towards the inevitable digital future.  With 8.7 million iPods shipped last quarter alone there is no question that Apple’s 80% share is driving the market, but what has it meant for music and the new music business?

In addition to making music easier to find and purchase the iPod perhaps unintentionally encourages free song sharing. You’ve got this big empty hard drive and your friends have cool tunes. Why not grab them?

And thanks to the iPod, the album and all of the revenues that the stakeholders shared in this $15-$19 purchase are gone forever.  How often will someone grab a few favorite tracks for 99 cents each rather than spend $10 for the album download or $15 for the CD. The result?  Record labels, publishers, retailers, and artists all make a lot less money.

Since the economic incentives are shifting towards a singles driven marketplace how can musicians and the business not be all a about one song rather than a whole career?  Will the gap between "popular music" and music as art widen as it did in the 1940’s, 50’s and early 60’s?

A slew of worthy iPod competitors including Zune, SanDisk and Sony’s new Walkman are here or on the way. While some may provide needed competition; none are like to fundamentally change the new paradigm that the arrival of the iPod and iTunes created five long years ago.

Change is inevitable. Band’s and labels need to begin now to release songs in smaller clusters.  A constant flow of content along with a strong web presence and touring may lead to the longer careers that the previous paradigm sometimes provided.  And if we want to monetize this new shift what about selling catalog by the gigabyte to new player owners?  Enough great music to fill you Nano for $50 or $100.

Only with creative action can we hope to compete with "free" and the ever change whims of the marketplace.  And get ready for the next great paradigm shift in music consumption – the cell/player hybrid with instant over-the-are content delivery. Can we even imagine what the next five years will bring?

Sources: cNet, Hollywood Reporter