Reader Comments

Paul, you're clueless. From a marketing perspective, a 5 percent return on a campaign is not a complete flop, that's higher than most average returns. Plus, the fact that I'll bet many new users tried buying on iTunes because they could do it for free. I'll bet you were also one who thought reaching 70 million songs was a pipe dream a year ago. Editor's note: Steve Jobs disagrees. He called the Pepsi campaign "disappointing." They were expecting 20-30 million redemptions. --Paul

It was my understanding that nobody ever expected all 100 million songs to be redeemed, especially Pepsi, who was picking up the tab. 100 million was never announced as a goal, just the number of codes out there. Did you speak to anybody at Apple before writing this?

Is it that you're jealous of what Apple has done to revolutionize the computer and now the digital music industries, or is it that you can't stand that Microsoft has actually been beaten fair and square by a rival company? The so called "missed goals" aren't so much missed if you'd look at any other music store, none of which have sold more than 40 million songs. Steve Jobs does know what he's talking about when it comes to customers wanting to own their music, or I'm sorry does someone that writes for an online magazine know more than a man at the helm of a multi-billion dollar company? Concerning the Pepsi "flop" in the end it only shows that Apple is once again ahead of the market in terms of technology and foresight. Digital music is only really useful to the 50% of internet users that have broadband, and if less than 75% of houses in America have internet access, the numbers compute that not even the 30 million songs they actually expected to be claimed would be in fact claimed. Get your facts straight. Your message sounds like its coming from a political campaign. We should all rejoice in the rivalry and amazing revolutions in technology that continue to occur daily.

I don't know how you can call what Apple is doing with WMA support. It's a work around for people that have WMA files. The most anti-MS thing I think any company can do is move people away from MS technology. Apple is moving people to AAC they are not supporting WMA. Trying to turn what Apple has done with the iTunes update to look like WMA support. Only makes you look silly, "support" was a poor word to use. But I suspect you knew that and used it in an attempt to make your WMA prediction look right.

Good supra-mainstream writing.

iTunes has been hugely successful without the benefit of a hugely successful promotion. The fact that the promotion didn't do well doesn't necessarily indicate that iTunes isn't doing well. You did point to the success that iTunes has had, smugly. The whole point was to get music lovers tuned into the new online market. iTunes has 70% of the online legal downloads market. This speaks a bit louder than the Pepsi/iTunes "debacle" does. What does it matter, then, if the Pepsi promotion did not live up to its inflated expectations. And to say that Apple is not ready to innovate the next big electronics push is so far from the truth. So the iPod isn't the only good mp3 player on the market, but it's the only one with an innovative user-friendly interface. That's why iPods are so successful. Furthermore, to say that Apple lacks innovation is asanine. It was Apple who introduced the world to the icon-based, user-friendly operating system. WINDOWS STOLE THIS IDEA. The dual G5 will outperform any PC it is matched up against. Consider the fact that Virginia Tech built a supercomputer, ranked third in the world, with dual G5s. The grand total for this project was roughly 5 million dollars. Please, next time you wish to write an article about Apple's failing promotions, take this to heart.

Wow, even as a Windows user this article seems excessively Rah-Rah Microsoft. I don't need to rise to the bait and defend Steve Jobs and his company -- plenty of zealots to do that, I'm sure. But the article's headline masquerades as reporting, when this is editorial or "analysis" at best. -r

Should have gone with Coke. I wasn't interested in Pepsi, but I would have bought a ton of Coke if they had free iTunes in it.

Can antbody tell me why someone would want to watch anything on a tiny video screen for anything but as a viewfinder on a video camera? This "killer ap" makes absolutely no sense to me.

I'm not sure people want to actually watch videos on their iPod. The screen would be way too tiny. And, subscriptions are a major turn-off -- at least, I avoid 'em because my usage varies from month to month. (A good example is my gym -- they charge $50 a month (membership) -- but there have been times where I haven't been able to go in two months -- I'm forced to paying $100 for no usage whatsoever. To the cost-concerned consumer (like me), making the model subscription based would be a turn-off. I like the fact that I can buy and keep the songs I purchase from Apple's store, and I think many people feel the same as I do. Thanks for hearing me out. -Krishna Sadasivam Creator of "The PC Weenies" http://www.pcweenies.com "Tech 'toons that kick ass!"

>> ... company isn't prepared to innovate the next big consumer electronics push << Of course there is also the possibility that Jobs is corrrect in his statement(s) that subscription music and video on a hand-held are non-starters and that Apple will innovate the next big push, it just won't be in those areas. There is no reason to assume that, just because Microsoft has decided that subscription is the way to go, that they are automatically right. Maybe this time someone else is going to define the market. Mike

Leave it to Thurrott to take a success story like the iPod and iTMS and attempt to put it in the worst light possible. You can already see the bias right from the start in the headline. Instead of "Apple Sells 70 Million Songs in First Year, Achieves 70% Market Share" we focus instead on not reaching an arbitrary goal, and a promotion that was botched by poor distribution on Pepsi's part, not Apple. There are also some real gems. Instead of "standards-based technology bent" we get "anti-Microsoft technology bent." Since when has Microsoft embraced standards, instead creating their own "standard" like WMA? And taking swipes at Apple, calling them "short-sighted" and "downplaying of markets for which it has no solution," just adds to the fun. Fortunately, Paul's blog can record his failed predictions for all to see. Here's one of my favorites: http://www.internet-nexus.com/2003_07_27_archive.htm "it's clear that Buymusic.com is going to stomp all over the iTunes Music Store. WMA is the right technology, Windows is the right platform, and Buymusic.com supports a much wider range of PCs and devices than does Apple." I suggest Paul sticks to parroting what the Redmond marketing machine feeds him, and leaving the strategy to profitable, successful companies like Apple.

Hilarious! Lovely pro-Windows slanted information. I especially love your comments on the validity of statements from various sources. Good adjective use too. Too bad you have to work so hard to convince your audience to buy Microsoft products.

I'd hardly call adding support for WMA "anti-Microsoft" - you consider it anti-Microsoft to provide any kind of interoperability with their "technologies?" I guess in the same sense, all those bridges that allow you to get out of New Jersey are anti-New-Jersey, huh? "A video iPod with subscription services capabilities?" What for? They want that huge RCA Lyra market? Oh wait, they must want that huge music subscription services market. Why not just admit that it's killing you that iTMS is #1 and you can't understand why. Like so many Apple-bashers and MS apologists, you just don't get it. Been reading your site for a while (strictly for laughs), and I have yet to hear a single word of sense out of you. You claim that Apple "isn't prepared to innovate the next big consumer electronics push" but you overlook the fact that they're innovating the next big consumer electronics push right now - iPod. When the video market is ready (it's not yet) Apple will crush all opposition there too.

Misplaced Bravado? Here's misplaced bravado: "The iTunes Music Store...is now officially toast". (Paul Thurrott-July 22, 2003) As for "downplaying markets for which it has no solution®," isn't that a Microsoft Trademark?

"You're missing the point. I have no personal responsibility to explain myself to you in an email. I wrote that a transcoded file will sound like crap, and it will. Have you tested this? No? Huh. Well, I have Jamie. And it does sound like crap. Yeah, it's better than nothing. But I've spent a lot of time transcoding, as I've written, and I can back it up. End of story. Well, not entirely. You seem to think I owe you an explanation every time I make an assertion. I don't ask you, for example, who the hell you think you are, what your qualifications are, or why I should ignore my own experiences and base my opinions on your (unqualified) opinions. But then, I don't hold you or any other Mac fanboy to any kind of a bizarre standard. If you don't like what I write, simply ignore it. I don't advertise it, or try to make people read the site, and I never have. But please. Spare me the holier than thou emails. Paul." You are a truly pathetic imbecile.

An important thing to remember about the Pepsi promotion is that it was not Apple's fault that only 5% of songs were claimed. Pepsi failed to deliver the bottles in time to many major markets, including L.A., while Apple had their music store prepared to accept codes from the beginning, Feb. 1. It was also very easy for a user to download a song once the code was entered. Despite the low rate, however, the promotion did make many people very aware of iTunes; on Feb. 1, when the promotion was announced, after the Superbowl, Apple's web traffic jumped over 800%. Also, in terms of the Microsoft software to allow subscription songs on portable players, it will be interesting to see what the labels think. I can't imagine them loving this idea, when instead of getting paid for every song, people will pay $10/month for all songs. What may happen is that the labels will allow certain songs to be played on portable devices from a subscription, but prevent others. This would result in confusion for the customer and could kill the whole idea if the songs prevented from being played on portable devices are popular.

Nice, and typically expected, negative spin Paul. First, did Jobs "promise" 100 million sales or was he aiming for, hoping for, projecting... etc? Big difference. It's MS that promises the moon with over-hyped vapourware then usually has to either... delay, delay, delay and/or cut promised features (witness Longhorn) or simply produces "copy" crap. As to the Pepsi promo... you can hardly blame Apple (though you do cast pretty good dispersions) if Pepsi cannot gets it's product and contest distribution act together. Apparently, many areas of the U.S. didn't see prize bottles until the last few weeks... months after the offer first started. Newflash... Apple is also to blame for the world-wide weather problems, the economy, conflicts in the middle east, etc.

Paul, in case you missed this information on MS' Janus technology and subscriptions, from the iTunes conference call: Steve Jobs: Well, here's the deal, Microsoft doesn't own the content and the content owners don't think that's a very good idea. The content owners are not going to license their content through a subscription model to be put on portable players for $10 a month. Give them $50 a month and they'll think about it. Some of them won't do it at 50, maybe others will, but of course, nobody would pay that. So, at a price that customers will pay, the content owners are -- we do not believe, and they all told us -- they're not willing to license their content through a subscription model where the user has the rights to put it on a portable player, so we can create all the technology we want, but if our music store doesn't have any songs in it, it's not going to matter. http://www.macobserver.com/article/2004/04/29.9.shtml This would seem to be an insurmountable problem, Paul.

Puh-leeeze! Honestly, this wintel claptrap is getting so tiresome, can't you find someone else to target your 'yeah, but' patronising remarks to. Every single article on this topic has already mentioned what Steve himself has admitted: it aint 100 million, but it aint bad. Look, I know a lot of poorly educated wintel-loving types, the kind of people who think that the market (or, might) must be right and if it isn't then they have to stick up for it, but if open source, business people protesting against corporate-sponsored warfare and recycling haven't already alerted you dimwitted slowpokes to the massive shift away from the industrial-revolution fat-cat model nothing will. Apple are different, so are Red Hat and so on... Different isn't bad, it's just...different. And wether you Monopolysoft PR placements like it or not, we aren't going away. Not open-source, not computers that work, not business people who are willing to stand up to corporate bullying. So get used to it buck-o. Deal with the diversity and quit gloating, just cos wintel is rubbish and everyone hates it and they're all jumping ship to Linux and OSX, doesn't mean you have to overcompensate. And before I step off the soapbox - subscriber services are going down the tube, cursing and swearing at iTunes all the way, and you're praising Monopolysoft for supporting a failed and inherently stupid business model in direct opposition to one that works and runs on open-standards! Oh and one more piece of rubbish: "Apple also quietly began retreating on its anti-Microsoft technology bent, adding support for Windows Media Audio (WMA)". Ha-ha-ha-ha-ha-hooo-heee-ha-ha-ha-ha-oh, please stop this is just toooo funny. I think what you meant to say is that Apple engineers have once again managed to thwart M$ monopoly business practises, just like they did from the start with the ability to read M$ discs, just like they did with one-click networking in Panther, just like....and the list goes on, and the open source community are really getting into hacking M$ apps so we can all communicate in open-standards and retain our diversity. But don't let that stop you, keep on whining, there are always people who want computers that crash and are prohibitively difficult to use and these people need complicated things to fix so they feel intelligent and most of all they need you to keep telling them it's ok to feel that way. -Ash. I'm a mac-user (switcher) at home and a Wintel user at work.

just you wait thurrot.. a portable video player is NOT a novel idea..one which will indeed fizzle... it's funny that you think people want to stare at a 3" screen while their music plays or watch a movie.. while... moving or something.. like, what? on a bus, in the backseat of the car...?? the portable media centers would not fare well (understatement) against the tiny ipods...and its video capabilities won't compete against laptop users who can play dvd's (I know, some dell laptops don't have dvd capabilities..*ahem) for what it's worth.. the 100 million thing was a goal..not necessarily a promise... downplaying of markets for which it has no solution?! ohhh you mean subscriptions? oh yeah..well, this isn't a technical problem...it's just that streaming music sucks for everyone involved.. especially the record labels.. as for the consumer, it's not exactly a sweet experience to feel that, basically you're paying $120 a year to keep the exact same music library, no matter what you do..

That's short-sighted. Late this summer, Microsoft and its many hardware partners will unveil a collection of portable media center devices and portable audio players that will be able to play back subscribed, and not just purchased, music. That means for a low monthly price--expected to be $10 to $20 a month depending on the service--customers will be able to stock their devices with a revolving inventory of 20 GB to 60 GB of content. Purchasing that content would be prohibitively expensive, backers of the scheme correctly note.

Steve Jobs is dead right on this one. People may buy quite a bit of music in any given period to justify a suscription, but they are not going to do that every month. Buying music is not like broadband access, electricity or gas - and there is no way a music service is going to be viewed as such. Music is a discrete, impulse purchase that people buy when they want.

All of the WMA music services so far have focused on people effectively renting their music collection for a monthly fee. No one wants it, which is why the WMA music services have been such an utter disaster. You might as well just listen to the radio - its cheaper. It has become very clear that absolutely no one realises this except Steve Jobs. There will be no world in which we have web services for everything, that are charged monthly. No one has that much money.

So..... The CRAPPLE crazies crawl out of the woodwork, and are as usual in denial, full of bile, sharp of tongue and full of so much hot air and very little substance. So what's new? Bottom line: No amount of spinning can change the fact: Steve Jobs loudly boasted he was going to sell 100 million units on Itunes by the one year anniversary mark. Steve Jobs and CRAPPLE failed misearbly to come even close to this figure. A massive 30% short no less! You can't spin that.LOL! Meanwhile, CRAPPLE's share of paid downloaded music has fallen sharply from over 90% 10 months ago to close to 50% today. Where is all that market share gone to? Why, to outfits using the best media player on the planet, Microsoft's Windows Media Player. Expect Microsoft's Media Player to have a bigger market share than CRAPPLE's Itunes by Christmas as kick ass outfits like Virgin and Microsoft themselves join awesome companies like Walmart and Napster in the Windows Media Player's corner. As usual, CRAPPLE is going to watch Microsoft eat their lunch yet again, without being able to do anything about it. But hey, that is something the CRAPPLE losers are pretty much used to by now. :)

These MS/Apple flame wars are really tiresome. Any article that says anything about Apple short of adulation is attacked by the Mac loyalists, then the Gaters have to respond. I thought your article was a balanced attempt at analysis of the developing music download business -- obviously an important topic.

Apple announced that it has sold 70 million songs online, a tremendous achievement for such a nascent market, but far below the 100 million songs that CEO Steve Jobs promised.

Oh wow, they were 30 million short. Are the people using WMA any better, or does this prove that the online music market has a long way to go?

all right, let's get one thing straight here. The online music market has quite a way to go still. It's quite a long way, but it is neither apple or microsoft or any one elses fault that this is happening. One of the biggest causes of this is still a generation gap. As someone who works in an electronics store and talks to ALOT of people about online music, the older generation still (for the most part) inherently distrusts online music, hell, the internet in general. and no, i'm not saying this is all of the older generation, but quite a few. The generation that grew up with the internet and will be the one's to really make services like these overtake other markets is still young, and are not in control of as much of the money currently in the economy as there parents are. It's the same thing as VoIP, even though it can save them money, it's basically asking them "hey, how bout i change the way you've dealt with the phone your whole life?" As far as subscription services, I think they have there good points and there bad points. I think Rhapsody is on the right track with 10 bucks a month and 79cent download, but i don't think they will entirely work til broadband becomes standard in all homes and they can work it down to something like 8 dollars a month and 50 cent downloads, which is highly unlikely from the record companies. And as far as the "CRAPPLE" and "MICROCRAP" debate.... Stop It!! Shut the Hell Up! honestly, yes, microsoft does alot of stupid stuff. But just because you support open source/mac/something else, don't expect every one else to switch over. Yes, your voice shouldn't be repressed yourself, but neither that of the other side. And even if your not a windows fanboy, the fact is there still by far the biggest out there, so adding "support", even if it is just a conversion, for there media format will only go to help there service. One of the reasons i think the pepsi/ipod failed (aside from poor pepsi distribution, yes i know) is the fact that the songs can only be output to an ipod. There's a hell of a lotta ppl out there that own an mp3 player out there (i've sold more than a few) and (here's a shocker to the mac crowd) NOT ALL OF THEM ARE IPODS. Not everyone needs a 10gb+ mp3 player, and if they can't output the files they dl to there 128 mb Rio, why bother? and yes, i know, they can still play them on there computer, but they then still need another program on there, aside from the music programs they already have on there, like winamp or (gasp) windows media player. Ah well, that's my rant. I'm sure some fanboy's going to use this to prove i'm gay now or something. BTW, I'm Bi-OS-ual, use windows box at home and work but mac for video editing projects.