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February 27, 2006

audible.com

I thought the audible article was pretty interesting. I didn't realize that audiobooks was such a large market. I personally never thought the idea of having a book read to me on tape never seemed to appealing, but I never thought about people who wanted to have stuff read to them while they were driving. I think it is a good idea to have daily updating content. I would like if your trying to appeal to people who are driving to and from work, then having the news available would be pretty appealing. The only problem I see with that part of their business is that I would think that a lot of people would just turn on the radio and listen to talk radio for free if they wanted to get their news. I think they could be pretty sucessful if they were able to somehow get the rights to the Harry Potter series. It would be hard for iTunes to survive if they didn't have the most popular artists, so I guess I understand how that can be a huge problem for Audible. Overal, its pretty easy to understand how they are struggling to stay in business.

February 19, 2006

Napster

This article brought up a lot of issues that are very important when you are looking at some of the problems the music industry must address. First and foremost, record labels need to find a way to control the amount of music that is pirated from peer-to-peer networks. This is a very complicated process, since these networks are nearly impossible to eliminate because they do not require a central server [Moon, 10]. Until these can be eliminated, it will be very hard to convince many consumers that it is necessary to pay for music downloads.
Once these P2P networks have been either eliminated or reduced, the music industry must then decided on how music will be sold over the internet. Currently, it looks as if the per-song payment method is the early leader, as nearly one billion songs have already been purchase of Apple’s iTunes at 99 cents a piece [Digital Music News, 2006]. Another model that has enjoyed some success is the subscription model, where consumers pay a per-month subscription fee. This model has not been as popular though because these services, such as Napster and RealNetworks, place a lot of restrictions on how songs can be used [Moon, 11].

February 15, 2006

Apple 2005

I think this article brings up a lot of interesting points that have growing importance when you think about where digital music distributors are going in the future. As this article noted, iTune songs can only be put on iPods, and only iTunes can be used to put songs onto iPods. This seems like a good idea right now, because Apple dominates both the digital music player market (with their iPods) and the online music distribution market (with iTunes). But, as we’ve seen in the past, this might not be the case forever. Many companies, most notably Microsoft, are desperately trying to cut into Apples share of this market. Microsoft has been talking a lot about introducing a digital music player of their own which could rival Apple’s iPod. As popular as iPods are now, I think it’s a good possibility that, eventually, someone else will be able to take over this market. If Microsoft and their partners are successful in this attempt, people will start straying away from iTunes, in order to be able to put their songs on their devices. At that point, I think Apple will have to start making their iPods and iTunes compatible with formats other than ACC.

February 7, 2006

Sweet Deal, Besy Buy (Varian)

Well I learned something very interesting in this paper: an interesting topic (technology) cannot make a boring subject (economics) any more exciting. I found this paper very easy to put down, and did so on many occasions. Despite my boredom, I was able to find a few interesting points in this paper.
I thought it was somewhat interesting reading the part about switching costs. I thought the ink-jet printer example was very insightful. Thinking back, I remember when I bought my computer and Best Buy was nice enough to add a printer to my “bundle? for only fifty bucks more. The sales clerk was even nice enough to suggest I upgrade to the HP printer, which, for no more money, will be a much better printer than the Lexmark that was supposed to come with my printer. Next thing I know, three months later I’m buying my first round of replacement cartridges for thirty bucks a piece. I never realized the power of a lock-in purchase like this, but I did notice that the Lexmark cartridges would have been ten dollars cheaper a piece. Thanks a lot, valuable Best Buy salesman!