Although dominant across industry latitudes, Apple Inc. is seeing its fair share of competition on all fronts of the company’s business. In most cases, Apple Inc. has been successful in silencing competitors.
In late July, speculation surrounded Apple Inc.’s rejection of the Google Voice app for the iPhone – which Google Inc. had planned to make available through the iPhone app store. Exclusive iPhone carrier AT&T was rumored to have initiated the block to the Google Voice app, as this application would have allowed for free text messaging and cheaper international calling that would cut into the carrier’s billing to customers. However, Apple Inc. made the ultimate decision, for reasons still unknown. In this case, Apple Inc. quelled competition from Google Inc.’s application developers. A year prior, July of 2008, Apple Inc. pursued Psystar Inc. in court for its manufacturing of alleged “Macbook clones”, laptops Psystar Inc. had manufactured to run on Apple Inc.’s operating system Mac OS X 10.5. The litigation against Psystar Inc. for copyright and software licensing infringement is currently ongoing, but Apple Inc. is surely winning this legal battle. Again, Apple Inc. successfully quelled competition.
Apple Inc. has experienced the greatest amount of competition in its business of music downloads, and yet still managed to control most of the market share. This can be attributed to Apple Inc.’s iTunes store and mp3 players – the iPod, iPod touch, and Shuffle. With such a hold on the music download market, will “download-ers” ever have an alternative to iTunes.com – an alternative to downloading from one site for one price?
Competition has came-and-went in the music download and file share market, but one site, amiestreet.com, may be here to stay. What sets amiestreet.com apart from the one-hit-wonders in the music download and file-share market? Its business model. Music is sold on amiestreet.com at a price scaled per song, ranging from free for new releases to $0.98 cents a pop for the most popular downloads (note, that even the most expensive songs are still a cent less than the iTunes standard price of $0.99 cents). According to Amie Street Inc. CEO Elliott Breece, amiestreet.com works to “innovate at the business model level”. Although songs are cheaper to download than iTunes arbitrary price of $0.99 cents, Amie Street Inc. contracts with many artists directly, with the artist receiving roughly 70% of download profits, and amiestreet.com retaining 30%. So, says Breece, “There is never a point for a loss.”
This is drastically different from the so-called business models of past contenders in the music download and file share market. The once popular Napster.com and Limewire are much avoided due to the rampant prosecution of music aficionados who download from them – since neither promises legal license for its content, which is in fact rarely the case. Neither is amiestreet.com a peer-to-peer file sharing site, like thepiratebay.org which may be shut down in the near future due to an ongoing case against the four principle operators charged with infringement of copyright law (In breaking news today, thepiratebay.org may be seeing its short lived stint in the music download market end; Restriction to the site has been reported. This may be due to the Dutch court ruling on Monday, when authorities temporarily banned the site in the Netherlands.). The legality of amiestreet.com’s business operations places this music download site in a boat apart.
When the music download market seems laden with lawsuits, all of which are filed against sites contending for iTunes.com’s market share – amiestreet.com may prove to be the legal download alternative music fans are looking for. Currently, amiestreet.com does not offer as much content as iTunes.com, and in fact most of the content on the site is from independent or upcoming-from-obscurity artists. Although convincing major labels to enter licensing agreements with amiestreet.com is, according to CEO Elliott Breece, “a hurdle”, he also makes clear that, “That’s our goal, to patent as much content as possible.” With the growth seen in just 3 years since the site’s founding in 2006, more content, including mainstream content appears inevitable. Also, Amie Street Inc.’s ventures into promoting music events increase the popularity for amiestreet.com with artists, record labels, and event-goers alike – creating just the right traction the site needs to jump over the music industry’s “hurdle”.