Europe’s Legitimate Music Download Sites Rush To Beat iTunes
The European music download scene will turn around in 2004. Many consumers who have routinely downloaded for free will become resigned to paying for legitimate services. Portals will benefit first; Apple’s iTunes and Napster will win in the long run.
“Attempts to stop illicit downloading in Europe have failed so far,” said Forrester Senior Analyst Rebecca Jennings. “But commercial sites just need to be patient as the market gradually changes. In 2004, a combination of legal action by the music industry and expansion of legitimate services will cause a watershed in the download market.”
Privacy law has stopped anyone from going to jail yet, but Forrester believes that the threat of a lawsuit is enough to make consumers consider legitimate downloads. Also, several dozen sites already sell legitimate downloads in Europe — from portal offerings like MSN Music Club to retailer sites like Fnac. OD2, the service powering many of these, already has nearly 0.5 million registered users, according to the IFPI. More launches are planned: Apple’s iTunes should finally reach Europe this year; Napster is expected, too; and Coca-Cola’s January launch — although hit by technical difficulties — shows that even consumer goods brands want to get in on the act. New features increase the attractiveness of paid-for services.
Also, the UK’s Wippit allows consumers to continue their peer-to-peer behavior without violating digital rights, and firms like Tiscali Music Club allow downloading to devices like portable players. In the longer term, new devices like the Windows Portable Media Center will allow consumers to download and watch videos and interviews as well as music tracks.
The various distributors are all trying to establish early-mover advantage in the embryonic European commercial download market. Portals will take an early lead, Coca-Cola will fizz, but most consumer goods firms will fall flat, and iTunes will bite back.
“In the lull before Apple and Napster get to Europe, portals like MSN and Tiscali will take the lion’s share of the nascent market,” Jennings added. “They benefit from strong brand names, high audience penetration, significant marketing and cross-promotional capabilities, and — in the case of ISPs — an established billing relationship. However, those that retain unwieldy, inflexible services — such as requiring purchase of credits before songs can be downloaded — will be hit in the longer term once easier-to-use competitors come along. Big-bucks marketing campaigns, a deal to sponsor the official UK music chart, exclusive tracks, and competitions for hot tickets to events like The Brits will make Coca-Cola’s offering succeed — assuming the launch-day problems aren’t repeated. But there will be little room left for other consumer brands. Those tempted should pay heed to Unilever’s and Procter & Gamble’s ill-fated ventures into the teen portal market a few years ago: Who remembers Wowgo or Swizzle now? But over time, Apple’s ease of use, seamless linking with the hot iPod, and enormous brand traction will see it overtake many of the smaller services in Europe — as has happened in the US. Napster may give it a run for its money in the ease-of-use stakes but will suffer from lower brand awareness in Europe.”