MacNN | Is Apple holding back the music business?

“Apple may be holding back the music business, according to a new BusinessWeek column that notes iPod sales-nearly 10 million or so expected this holiday season-have not driven sales of digital music. Apple’s closed iPod/iTunes system may preventing the market from growing as fast it could because it limits buying choices—at least according to its competitors such as Napster and RealNetworks. Citing figures from Nielsen SoundScan, the report says that average weekly download sales as of Nov. 27 fell 0.44% vs. the third quarter.”

Ah yes, this BusinessWeek column based on competitor’s claims Apple is holding back the music industry.

Why?

Because they tightly control their platform, providing a smooth customer experience from purchase to consumption.

Cheese with your w(h)ine guys?

Seriously, competitors whine and the best they can dig up is that weekly downloads fell 0.44%?

Gee, could it be the Christmas consumptive gorging that is keeping people from buying music?

The plethora of excellent movies in theaters?

Perhaps, its just the lack for original and captivating content from the media mongers?

A few facts seem be missing from this and other recent articles.

• Apple is the undisputed leader in this market today
• Consumers are eager to snap up iPods, at least while Microsoft leaves store shelves barren
• iPods ARE being filled with content, just not old school content

This story proves beyond a doubt, that Real, Napster, Yahoo, Walmart and Microsoft are all scrambling for the crumbs. Being envious also-rans, whom instead of duplicating Apple’s process and quality, insist on recreating the wheel.

With vanishing all-you-can-eat “subscription” models and a decidedly miniscule ability to garner the mind share Apple has, how long before we see a desperation partnership?

On that note, this week Microsoft and MTV announced the URGE content service. Delivering not-so-fresh content from MTV using Microsoft technology.

I predict Microsoft and MTV will spend a boat load of money, only to discover that there is little profit in content delivery for the middlemen.

This is where Apple is brilliant. Its profits come from the consumption platform, like iPods, iBook the rumored Mac Mini media center, or production tools like Final Cut and Quicktime, and not the content.

The Microsoft/MTV deal seems more like putting a tourniquet on a fatal head wound. The shot has long since done its damage.

The damage being the liberation of consumers from old school distribution channels.

Mr. Gates repeat after me. There are no big profits being a middle man in the content distribution business. Unless you own the pipes or platform from end to end.

Either make content (games, software, movies, music, etc.) or build the high profit end-to-end platform which produces consumer interest and loyalty.

The great opportunity here is, that while there are no big profits being a middleman, there is profit for small agile companies, like CD Baby.