iTunes Music & Movies Invasion

Apple recently released iTunes 11, a completely redesigned apps with new more interesting and intuitive navigation. Along with this release is also the launch of iTunes Music service in 54 new countries including Indonesia. For most people in the US this is hardly news but for Indonesia, this has the chance to potentially become game changer. With continuous decline in CD sales, almost dead mobile content business model and struggling online distribution, Indonesian music industry is basically living in borrowed time. Personally, I could care less about the major labels’ fate and anything that might happen to them.

As an owner of independent label where selling 1000 copy of release is considered a success this has the potential to change the way we do business. As a label we usually operte with budget of $1000 per release. Yes, its totally small. Half of that goes to the CD pressing, some printings and the rest are for marketing (usually music video done in ridiculous low budget). Since we specialize in electronic music, the recording process cost almost nothing while the mixing and mastering are done in-house. Producing the CDs are the easy part. Distributing the CDs is another thing. The big retailers usually refused to carry our products while the cost of shipping to mom & pops store eventually piled up. iTunes completely eliminate this. If we operate with $1000, now we can spend them better in marketing.

Some will argue that iTunes reach is pretty small. Well, our market is small to begin with so it’s not that big of a different. At worse, if we operate the same way,that $1000 can be spread among 5 releases or so. Either way, this is a victory for smaller independent label. At the moment the main disadvantage of iTunes is its credit card requirement. Many Indonesian don’t have one at the moment. In order for itunes to really take off in Indonesia, they need to find a better payment scheme. Auto debit from bank account or paying with mobile phone are probably much more effective form of payment for Indonesia.

In the present, iTunes store might not make an impact at all but in the long run, it will be the only player (unless Amazon and Google decide to dip their toes into Indonesian market too). In the end though all the music industry player will win and the pretenders will died out. Here’s an inside joke for all Indonesian music industry player.. “we will not be dictated by a fried chicken seller anymore”.

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