Apple, iTunes, and Podcasting · Wednesday, October 20, 2004

Every day, I hop in my car in the morning and drive between 30 and 45 minutes on a slow commute to my office. The experience is kept palatable by a combination of National Public Radio and my iPod. For others, it may be their CD collection and a top 40 station, or sports talk radio, or a political talk station, or possibly Sirius / XM Radio. While sitting in traffic last week and flipping through stations, a thought occurred to me. Before I get to that thought, its probably a good idea to provide some background.

The Core of the Apple

Over the last few years, the distribution of digital music has been one of the hottest issues on the internet. Right in the thick of it all has been Apple, with iTunes, the iTunes Music Store, and the iPod leading the way in terms of user experience and affordable digital music. In my mind, the things that make the iTunes Music Store the most successful music store are:

• Tight integration with the best and most popular music player—the iPod
• Music is purchased with reasonable restrictions—not rented

However, it has been made clear to many people by Apple that the iTunes Music Store doesn’t really make a whole lot of money for Apple. Instead, its just another way to drive the sales of iPods. This strategy has paid off big for Apple, while other music stores languish in their poor subscription models, and try to make a profit off the pennies-per-song that the record labels give them. The result is that Apple has something like a 70% hold on the digital music market, and is leaving the competitors in the dust.

One certainly cannot blame the other music stores for wanting to have a sustainable income stream from subscriptions, but the problem remains that people don’t want to rent their audio—they want to buy it. But, the competitors have a point—Is there a way for Apple to tap into a sustainable income stream through the music store?

Blogging Leads the Way

Blogs have erupted onto the scene over the last few years, and have become a driving force in the direction of technology. Blogging has pushed the limits of web-standards, led to better web browsers, and has started the syndication revolution. I can remember the days when I had a massive set of bookmarks, and had to manually check my favorite sites periodically for updates. Now, news aggregators are gaining popularity, and are getting better and better every day. Even Apple is catching syndication fever, and is adding RSS and Atom support to Safari in its next release of Mac OS X, code-named “Tiger”.

Pushing Audio

The blogging community has been buzzing lately about a new technology called “Podcasting.” Without going into too music technical detail, Podcasting is the beautiful marriage of syndication and digital music, allowing savvy bloggers to create their own customized, syndicated radio shows. A Podcaster can essentially build a playlist and embed those songs into an RSS feed through “enclosures”, which can then be transferred as songs come in to your iPod. Its a great idea, and one that I wish I had thought of first!

However, there are real issues with Podcasting as I see it:

• You cannot legally put copyrighted content into a feed.
• Feeds range widely and you have to pick through them bit by bit to find the interesting parts.
• Its too difficult for the everyday user to find content and subscribe to it.

Again, its a great idea just searching for some direction.

Fruitful Podcasting

So, we snap back to reality, and hundreds of thousands of people sitting in their cars on the way to work, wishing they could hear the news, talk, and music that speaks to them every day. Apple has the world’s most successful online music store, but cannot seem to find a way to make it sustainable and a big money-maker. It seems like a match made in heaven.

Apple has an opportunity to learn from the trends, and produce a truly killer-app for digital audio distribution: bring Podcasting to the iTunes Music Store. Apple has the digital rights to tons of audio content, including music, audio books, NPR programming, and more. They have a rating system, recommendations engines, and purchase tracking. For a small monthly fee, Apple could provide a personalized audio feed that is integrated into iTunes. Using your recommendations, Apple could build a daily customized radio show that would be automatically placed into your iPod each night as you slept, and would be ready for you to listen to in the morning. The radio show could contain any combination of news, music, and other audio content. Through partnering with local radio stations, Apple could provide content that is relevant to each and every listener for a small fee. No commercials. No flipping channels. And its all integrated right into iTunes and the iPod.

It seems to me that an iTunes Podcasting service would be truly useful, very popular, and could take the iTunes Music Store from being barely profitable to a huge money-maker in a matter of months.