Tuesday, January 25, 2005

Do you get sick of the Tech Press at times?

I'll keep the scope narrow here. I'm mainly talking about some of the Press response to the iPod. Apple is certainly in an enviable position right now. As numero uno in the digital media genre they have a large and bright bullseye sitting squarely on their back. When you are sitting in rarified air on your pedastal everyone wants to knock you off and assume your position. This "frenzy" regarding the iPod has led to some very interesting tech reports. Mind you it seems like not a day can go by without someone launching their FUD campaign against Apple. Let's look at some recent posts however.

Mike Goodman from the Yankee Group seems to think that Apple is missing an opportunity of such dire importance that it could threaten their very lead. Perhaps. He seems to base his assertions on Apple's "lack of interest" in subscription model. We are told that the subscripton model is "gaining popularity" yet we have no press release to quantify this. Like many articles from the people who are supposed to "Analyze" we are left with a dearth of actual info. Every Apple press release is met with FUD but never any hardcore evidence showing that the subscription model is gaining any ground whatsoever.

Goodman insists that there were technological barriers present which led to two distinct forms of downloads. We'll yes if your tech barrier is DRM. Consumers don't seem to enthused about DRM but they remain enthused about music. Goodman says that he expects Apple's marketshare to drop down to about 50-60 percent if they do not employ a subscription based service. This is fair to me. I think over time Apple's marketshare will likely hit that naturally. However, the market will be so large in a few years that 50-60 percent will represent probably 3x the amount of hardware and software revenue they get today. Either way this funnels to one company and is not spread amongst a bunch of bit players.

I don't think "tethered" downloads will be as popular as these pundits state. While we all want access to as much music as possible tethered downloads will require people to purchase new devices that handle Janus (Microsoft's portable players DRM). That can be daunting if compared to an open and thriving iPod market that is growing. The inability to back up files and make copies is being severely underplayed by those who would benefit from "rent a music" schemes.

Janus has to prove a lot to consumers before it becomes the world beater that analysts are predicting. The iPod has been such a runaway hit journalists and analysts are falling over themselves to out FUD(Fear Uncertainty Doubt) Apple's position. It's been this way since the beginning. No one wants to hear nothing but good news, people thrive on a little drama. It'll be interesting to see just how well subscriptions do. Especially after that monthly fee lapses and people see their music go "poof".