Thursday, May 8, 2014

10 things Apple can do to boost iTunes sales

In a recent Billboard article, a record label executive was quoted saying "it doesn't seem like the [iTunes] store is refreshable". Harsh words for a platform that saved the labels in their darkest hour and currently generates 50% of all their revenue. Before giving up on selling music and following the herd into an unproven subscription model, Apple can make some simple changes to get people buying music again:

1. Ditch the desktop app. The iTunes desktop app is a lumbering beast. Even with the improvements in iTunes 11, it's slow and doesn't feel "cool". Users want slick web apps that are constantly being updated.  Apple can straddle the cloud and the desktop by splitting iTunes into a "service" (a la Dropbox) and web app.  The web app would communicate with the service to run tasks on the user's machine (playing music, file access, Airplay, burning CDs).  This setup would allow users to use iTunes from their browser and make it easy to keep the user interface fresh.

2. Provide an API. There are hundreds of innovative applications built on Soundcloud's and Spotify's APIs. These apps add new functionality that attracts new users. Apple needs to engage the music tech community to develop engaging applications that drive music sales. Currently, it's difficult and expensive for developers to integrate track sales in their applications.  Apple could provide a music sales API and usher a proliferation of apps that sell music.

3.Make buying music cool.  For a company obsessed with the user experience, Apple hasn't made buying music with iTunes fun or cool.  There is no feeling of connection with the artist.  Sites like Bandcamp have succeeded with features that allows customers to show-off their direct support for the artists they love.  iTunes needs similar features to give fans more than just a file when they buy music. It's a shame that Apple gave up on Ping (their iTunes social experiment). If they kept working on it, Ping might have made buying music cool again.

4. Support Windows 8 and Android. There has been a lot written about how Android is taking a bit out of iTunes sales. Apple fears that an iTunes Android app will encourage users to leave iOS. I would argue the opposite that getting Android users hooked on iTunes makes it more likely they will switch to Apple. More important than Android, Apple needs Windows 8 and Windows RT apps. Windows 8 now has almost as many users as all OSX versions combined. As people upgrade to Windows 8, they are more likely to look at iTunes alternatives (Windows 8 Music, Spotify, etc..). A compelling Windows 8 app will help keep the massive Windows iTunes user base loyal to iTunes.

5. Get rid of the junk.  The iTunes store is a mess.  Search for a popular track and you'll be confronted with dozens of different versions.  A "single version", "album version", "deluxe version" or the same song released on different albums. Worst yet is the dozens of horrible cover versions that surround the real song. I've spoken to a producer who makes thousands of dollars a month from iTunes customers who accidentally buy their cover version instead of the real song. All this clutter creates a poor customer experience and is a drag on sales. Apple needs to get rid of covers or display them separately on the store. Song duplicates need to be removed so users don't buy the same song twice.  Eliminating the clutter will  improve the user experience and certainly boost sales.

6. Unify the catalog across countries.  iTunes is available in more countries than any competing music service.  Unfortunately, the catalogs across the different iTunes stores are not unified.  The same song can have different identifiers across the iTunes stores which makes sharing links to tracks difficult (a user shares a link to a track using an iTunes US identifier which can't be accessed by someone in France).  Also, a track available in iTunes Brazil may not be available in the iTunes US store. The isolated iTunes stores make it difficult to promote tracks worldwide and leads to user frustration.  Apple needs to find a way to unify the catalogs so that all songs are uniquely identified and available in all countries.

7. Make iTunes match free. iTunes match mirrors a user's existing music collection in the cloud (with no questions asked about how the music obtained). While the service has received mixed reviews, I believe it's the $25/year price that slowed adoption.  Apple should use iTunes Match as a marketing and user retention tool.  Once a consumer has their music collection instantly accessible to them in the cloud, they are less likely to switch to a subscription service (or to an Android device).  With the "hassle" of storing their music removed, users can confidently grow their digital music collection.  With Spotify and company spending billions on acquiring users with free music, Apple can use iTunes match to attract people to their ecosystem.

8 Retention emails. I'm always amazed when I receive my bi-monthly "new on iTunes" bulk email that Apple doesn't use my purchase history to tailor the email. I would love to know when an artist I've purchased from before releases a new album. Or when they are performing in my town. Apple can deploy these retention features using the data they already have.

9. Better  pricing. I buy a lot of music which makes me an ideal Spotify customer. Apple needs to do more to keep customers like me.  Given the choice of spending $10 to get access to all of humanities music for a month or owning 7 tracks (at $1.29), it's obvious people would take the subscription.  However, if I could get 20 tracks/month for $10, that shifts the balance.  Giving frequent buyers of a music a price break will make switching to a subscription less attractive.

10. Start marketing. Where did Apple's legendary marketing go? Gone are the splashy iPod ads that promoted iTunes. Seems like Apple is too comfortable with their dominant position. They need to start selling the advantages of music ownership over rental. Show that most consumers don't get value from paying $120/year for access to music they will never listen to. Spread some FUD (fear, uncertainty, doubt) about how subscription rates will go up and once you stop paying, you're left with nothing. Apple also needs to market the fact that their store makes more money for artists than rental services. It's time to invest some marketing dollars in the iTunes music store.

Apple could have offered a rental/streaming service 11 years ago when they launched iTunes.  In fact, there was a serious debate within Apple about whether to go with a rental or ownership model. Steve Jobs made the decision feeling that  people want to own their music. I think Steve Jobs got it right then and is still right today. Apple should show some more faith in their founding father's instincts.

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