For all the disruptive innovation Apple has unleashed on the markets for devices and software it has not been particularly disruptive to the content markets it has entered. Often just the opposite.
By the time Apple introduced the iTunes Music Store the record business was already reeling from the impact of Napster and its progeny. Rather than disrupt the business, Apple’s entry created a new market for paid downloads. The record companies later came to rue the terms of the deals they made initially with Apple, the iTunes store helped restore legitimate commerce to digital music platforms and on balance has been a net positive for the incumbent rights owners.
Apple is now trying to do the same thing in music streaming, relaunching a paid-only Beats Music service as the record companies try to marginalize free streaming platforms.
Apple’s entry into the ebook market followed a similar pattern. By the time Apple launched the iBookstore, the publishing business was fighting a losing battle against price erosion driven by Amazon’s aggressive ebook strategy. Far from adding to the disruption, Apple went so far as to orchestrate a conspiracy among the major publishers, according to the government, at least, to force higher prices on Amazon. Read More »