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iTunes to tackle Europe
June 7, 2004
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Despite being late to the game, Apple is planning to muscle in on the European music download market, perhaps as early as the 15th June. Apple blames the late arrival on red tape generated by the music labels in Europe.

Confirmation of the launch is due at a news conference in London on the 15th June. Apple rarely leaves a delay after making an announcement to the media.

Upon arriving in Europe, iTunes will have some tough competition to play against. OD2 is a well established player in the market, with backing from over 30 partners, including Microsoft and Coca-Cola. iTunes will also have to fight their archenemy, Napster 2.0. Now offering 700,000 tracks, Napster 2.0 is already offering the largest collection of music in Europe.

The odds are not stacked against iTunes. Apple’s iPod, which is tightly integrated with the iTunes software, has seen strong sales in Europe. This provides iTunes with a customer base and a strong brand image, giving iTunes a strong foothold without being present in the market.

iTunes will be entering a particularly lucrative market. Napster 2.0 has set prices in the UK to double that charged to American consumers. OD2 is not much more respectable. It is unlikely that Apple has plans to trigger a price war, but the details of the European launch have remained a closely guarded secret. There is speculation that tracks will be priced at 99p in the UK.

Europe is a considerably smaller market than the US. From January to mid-May, European services collectively sold 500,000 tracks. This is in contrast to 70 million tracks sold by iTunes alone in their first year in America. The British Phonographic Industry believe this is set to change, stating that the market is being stimulated by the steady uptake of broadband Internet, various promotions, and strong industry backing. “I think that will be accelerated even more by the introduction of iTunes,” adds Jay Berman, IFPI chairman. If correct, iTunes has yet to miss the bandwagon.

Apple, notorious for their secrecy, have yet to make a statement, except to say, "the biggest story in music is about to get even bigger.”

With a current strategy of extortionate prices and DRM, it appears the industry is offering another rotten carrot to file sharers. iTunes is therefore unlikely to damage P2P. But to the industry a carrot is a carrot. Therefore, iTunes gives greater rise to the likelihood of a stick - in the form of large scale lawsuits in Europe.

This story is filed in these Slyck News categories
Authorized Music Store :: iTunes

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