Whitepaper Outline

I. Introduction to the industry from the CD onward

The high cost in the peak of compact discs

1. Before the rise of napster, the average price of CD’s was 15-20 dollars.

2. Pre-online music downloading, consumers had no other option but to pay steep prices set by the record labels.

3. After years of high prices, a music service called Napster came to be, shaking the industry and totally changing the industry, as we knew it.

The rise of Napster: The right place at the right time

1. Shawn Fanning creates Napater in 1999, paving the way for the P2P movement and scaring industry heads.

2. Users find an easier way to get the music that labels were overcharging for: free online downloading.

3. Napster paves the way for other P2P services like Kazaa, Limewire, BearShare, and more.

4. Record sales begin to drop due to the rise of usage of P2P systems.

What is next? Napster goes down

1. With the help of Metallica, Dr. Dre, and a ton of laywers, the RIAA shuts down Napster, while some of the smaller P2P services remain active.

2. Legal battles ensue, and users flee to the lesser known P2P services.

3. The i-Tunes Music Store is created in 2003, allowing legal purchasing of music from all the big labels.

4. Through i-Tunes, Apple sells over 3 billion songs as of July 2007.

5. Though i-Tunes proved to be a solid choice for music consumptions, problems still exists with the industry’s “legal” downloading through services such as i-Tunes.

II. Current Issues with i-Tunes and online music downloading

New programs have grown tremendously popular due to the rise in mobile technology.

1. Programs such as iTunes, Zune and other peer to peer programs are making it
easy to download and transfer music onto mobile devices.

2. Because it is cheap and easy, iTunes has become a phenomenon and made digital media more accessible.

Issues with iTunes

1. Many users have had problems with the restrictions of iTunes.

2. You are only able to burn a certain number of iTunes before it locks.

3. You cannot put music from an MP3 player into iTunes.

4. The default settings decrease the quality of the songs.

5. The program itself takes up a lot of memory and can slow the computer.

6. Because of the security settings you cannot share or use songs the way you would want to.

7. There is a five computer limit so you can only download the song five times. This becomes a problem because if your computer has to be reimaged more than once you will have to buy the song again.

Free vs. Cheap

1. It is important to examine the effects that illegal file sharing has on iTunes.

2. Many people prefer these illegal options because they are free and just as accessible.

We project that these issues will eventually lead to a decline in service for iTunes.

1. It is extremely important that iTunes solve these usability issues so that it stays at the top of the industry.

2. It will also be beneficial to somehow coordinate with cell phones to increase services.

3. A solution has to be met where the consumers and the music industry are both satisfied.
III. FUTURE

More Digitalization of Music

1. Digital technology certainly change the way of perception, consequently our consumption behaviors are following our perception.

2. Privatization trend in the economy of great scale is making non-stopping boom affect to the music sharing industry.

3. Music downloaders are not always making rational choices and the image of iTunes, as a brand, has an affect on this.

4. The bigger demand not only forces the decrease of prices but also force to increase in the quality.

Personal Culture Tool

1. The mobile technology is the key tool of the “Global World” that we are trying to describe for last 20 years.

2. Cell phones became the most personalized products of our daily lives.

3. In the world of Cultural imperialism, we all try to impose what we consume.

4. File sharing will became “instant sharing” as a result of development in the mobile technology.

5. The “Big Five” in the music industry will follow the demand of users and welcome the mobile technology in everyway.

6. Increasing numbers of Japan Mobile music market is a foresight of the global market.

iTunes in the Equilibrium

1. Instead of music videos and full track downloading, the subscription services will have the biggest share in the market.

2. Apple’s iTunes music store sells about 75 percent of all legally downloaded songs worldwide.

3. The law side of the music sharing market will be resulted in favor of users.

4. iTunes still seems the number one candidate to be the monopoly of the market if you check its strategy in integration with cell phones.

5. iTunes will show the improvement not only in the quality of services but also in the quality of digitalization.