YouTube's Music Could Dethrone iTunes
YouTube's planned effort to offer "every" music video for free could dethrone Apple's iTunes as the leader in the digital music/media industry and eliminate the paid-for online content business model. Users watch 100 million clips each day via YouTube, and the video sharing site is in talks with EMI as well as Warner Music to offer music videos for free via download, according to Guardian Unlimited. The move threatens Apple's closed iPod/iTunes ecosystem which uses proprietary technology restricting tracks purchased from iTunes to play only on Apple's iPod and iTunes software. YouTube's popularity could mean free video-based music competition for Apple, and will likely leave iPod users out in the cold due to compatibility issues.
"If they develop portability - and that should definitely be on the table - then Apple could be in the unusual space of playing catch up," said Mark Mulligan, vice-president at JupiterResearch.
In addition, YouTube may be able to convert MP3 buyers by leveraging its online popularity, which could threaten Apple's dominance in the MP3 market as users look for compatible alternatives.
"Either way it is a nail in the coffin of paid-for services as the dominant online model versus ad-funded alternatives," Mulligan said.
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