The Times: Tech column - iTunes economics/social websites/Microsoft domain renewal
By David Rowan
THE MUSIC download store iTunes has been called "the coolest invention of 2003", and last week it claimed an 80 per cent market share in one of the fastest growing areas of technology. But what is extraordinary about the Apple system is its apparently suicidal business model. "There's no way to make money on these stores," the company's CEO, Steve Jobs, cheerily said last week. Even though iTunes has already sold 17 million digital songs, at 63p a legal download, two thirds of that goes straight to the music labels, the rest on administration. Has Jobs finally lost his touch?
Actually, he is being clever. The iTunes online store is designed to work smoothly with Apple's stylish (and profitable) iPod music player. If habits can be formed early, even if the "content" is provided at a loss, other music players become marginal. Guess which is the bestselling digital music player? Yes, the iPod, selling at a rate of two a minute and boosting Apple's cash flow.
Napster has just relaunched as a legal subscription service, as MTV and Wal Mart prepare download stores of their own (absurdly, the UK remains unserved). But if iTunes keeps its lead, iPod proprietary software will come to dominate a digital music market predicted soon to be worth billions.
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OCCASIONALLY, the web throws up a genuinely useful social innovation - a customisable information source such as UpMyStreet.com, or a private transport exchange along the lines of LiftShare.com. But what of all the other potentially life- enhancing ideas that go to waste because no entrepreneur sees profit in them? A new venture called MySociety.org may have come up with the answer. Set up by some techies with Westminster connections - some of the founders are behind FaxYourMP.com - MySociety.org is a charitable project that aims to use electronic networks to provide benefits at low cost. Anyone can submit an idea - and those that best improve the quality of life, or solve social problems, will get financial backing from this month.
Some of the early contenders are ingenious: a car-sharing service based on your mobile phone location; an online payments system that bypasses credit-card companies; and an electronic version of neighbourhood watch. Many of the more useful ideas are simply community-built databases that we would all use if they had been developed - an online collection of instruction manuals, or a localised rating of tradespeople based on personal recommendations. My favourites, though, are the simple tools that let people communicate: a mothers' and toddlers' information exchange, or the service that alerts the family of an old person living alone if they fail to e-mail a contact address each morning. The net may be a lousy tool for generating profits, but it does occasionally make the world a better place.
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SOMEONE AT Microsoft should buy a desk diary. It emerged last week that the corporation "forgot" to renew its hotmail.co.uk domain name when it expired on October 23. Hotmail, you may recall, is the world's most popular e-mail account - yet it took a call from the tech journal The Register to alert Microsoft that a private individual had snapped up the back-on-the-market domain. Four years ago, Microsoft neglected to renew the domain passport.com, which gives access to its Hotmail accounts. Only after it gave an alert Linux programmer $500 (£300) and a free piece of software did it re-acquire the domain.
(The Times, November 11 2003)
THE MUSIC download store iTunes has been called "the coolest invention of 2003", and last week it claimed an 80 per cent market share in one of the fastest growing areas of technology. But what is extraordinary about the Apple system is its apparently suicidal business model. "There's no way to make money on these stores," the company's CEO, Steve Jobs, cheerily said last week. Even though iTunes has already sold 17 million digital songs, at 63p a legal download, two thirds of that goes straight to the music labels, the rest on administration. Has Jobs finally lost his touch?
Actually, he is being clever. The iTunes online store is designed to work smoothly with Apple's stylish (and profitable) iPod music player. If habits can be formed early, even if the "content" is provided at a loss, other music players become marginal. Guess which is the bestselling digital music player? Yes, the iPod, selling at a rate of two a minute and boosting Apple's cash flow.
Napster has just relaunched as a legal subscription service, as MTV and Wal Mart prepare download stores of their own (absurdly, the UK remains unserved). But if iTunes keeps its lead, iPod proprietary software will come to dominate a digital music market predicted soon to be worth billions.
++++
OCCASIONALLY, the web throws up a genuinely useful social innovation - a customisable information source such as UpMyStreet.com, or a private transport exchange along the lines of LiftShare.com. But what of all the other potentially life- enhancing ideas that go to waste because no entrepreneur sees profit in them? A new venture called MySociety.org may have come up with the answer. Set up by some techies with Westminster connections - some of the founders are behind FaxYourMP.com - MySociety.org is a charitable project that aims to use electronic networks to provide benefits at low cost. Anyone can submit an idea - and those that best improve the quality of life, or solve social problems, will get financial backing from this month.
Some of the early contenders are ingenious: a car-sharing service based on your mobile phone location; an online payments system that bypasses credit-card companies; and an electronic version of neighbourhood watch. Many of the more useful ideas are simply community-built databases that we would all use if they had been developed - an online collection of instruction manuals, or a localised rating of tradespeople based on personal recommendations. My favourites, though, are the simple tools that let people communicate: a mothers' and toddlers' information exchange, or the service that alerts the family of an old person living alone if they fail to e-mail a contact address each morning. The net may be a lousy tool for generating profits, but it does occasionally make the world a better place.
++++
SOMEONE AT Microsoft should buy a desk diary. It emerged last week that the corporation "forgot" to renew its hotmail.co.uk domain name when it expired on October 23. Hotmail, you may recall, is the world's most popular e-mail account - yet it took a call from the tech journal The Register to alert Microsoft that a private individual had snapped up the back-on-the-market domain. Four years ago, Microsoft neglected to renew the domain passport.com, which gives access to its Hotmail accounts. Only after it gave an alert Linux programmer $500 (£300) and a free piece of software did it re-acquire the domain.
(The Times, November 11 2003)
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