Apple iTunes Threatened by Sony, Napster and Yahoo
Today Apple shares took a stumble on the stock market as news was released by two of Apple iTunes’ biggest competitors, Sony and Napster, and rumors were spread that Yahoo is looking to get into the paid music download marketplace. Apple shares dropped $2.22 down to $40.53 a share, as buyer interest in Napster and Sony soared – increasing their share values. Sony closed the day up $1.71 per share and Napster share value increased by 2.88% as it ended the day at $7.85 per share.
The drop in Apple value and the interest in Sony and Napster came after Apple experienced some nicks in its defensive shield as Napster expanded its successful paid music subscription service and Sony released three new digital Walkman products to the popular portable music device series. The two pronged attack threaten both Apple iTunes and their iPod music player.
The Sony Flash powered Walkmen models all feature Sony’s Stamina long battery life, ATRAC3plus and direct MP3 playback. These music players are incredibly small, have a selection of memory sizes ranging from 256MB, 512MB to 1GB, and are encased in a range of colors. The Network Walkman models include the bundled SonicStage 3.0 music management software converts and manages music from CDs, handles MP3 files, and provide access to Sony’s Connect Online Music Store’s 500,000 tracks and albums.
Napster hit the streets today in a cross country tour of its music download subscription service which is a dream for public relations. The Napster to Go Cafe Tour will launch tomorrow at the Coffee Shop in New York, one of four stops where people can fill up their MP3 players from Napster’s million-plus song library, and get some free coffee on top.
Along with the “free fills and refills” of MP3 players and free Napster to Go subscriptions ranging from 90 days to one year, Napster will also be giving away iRiver, Creative and Dell MP3 players at the tour events.
Although Napster subscriptions are a much cheaper service in the long run at $14.95 per month (if you’re downloading more than 15 songs per day), Apple has not yet changed its decision to continue to offer iTunes songs for the Apple iPod at $.99 per download. Given today’s news and the success of the Napster subscription service, his may, however, change in the near future.
“Subscriptions are a great thing for real fans because you get access to a lot of music. The appeal is it’s on-demand. As long as you keep paying, its all there,” Jupiter Research analyst David Card says. “The only reason they have iTunes is to sell iPods. If it turns out subscription services are important to sell iPods, they’ll probably get into that business,” Card says.
iTunes is bound to come out of the latest news with hardly any scratches, and this is no time for sour apples as the market expands and price point fluctuation settles. Industry analysts do not see Apple being knocked off of its white tower by Sony and Napster, just count the number of iPod listeners walking down 6th Avenue in Midtown Manhattan.
Needless to say, a new competitor seems to be firing up their arsenal of music download acquisitions, with rumors spreading of Yahoo opening a new paid music download store by the end of the month. Silicon.com reported today that Yahoo is about to launch its new music store and Yahoo Music Player and that Yahoo has been “working on the project along with digital-music wholesaler MusicNet since before the $160m purchase of rival music company Musicmatch.”
Silicon reports that the integration of a new paid music download service into the Yahoo Entertainment world makes total sense as Yahoo already has the existing search, customer and traffic base.
Yahoo! has begun to streamline its music and multimedia properties over the past few months, changing the name of its Launch site to Yahoo! Music and consolidating its entertainment businesses in a Santa Monica, Calif., office near Hollywood.
The new MusicNet-powered music service will be integrated into Yahoo!’s existing infrastructure, possibly including features such as links to its popular instant-messaging program, sources said. MusicNet’s technology allows companies to offer subscription services or per-song downloads, and is used by Virgin Digital Downloads, America Online and others.