What iTunes means for SA’s brick and mortar
Media analyst, Arthur Goldstuck believes that the arrival of several online media platforms in South Africa, led by Apple’s iTunes, spells the end for brick and mortar music retailers like Musica and Look & Listen.
On Tuesday, Apple launched a version of its iTunes Store in South Africa, giving users the chance to choose from more than 20 million songs.
Similarly, music streaming services, Simfy and Rara.com, have also announced their presence in the local market with both a competitive and an extensive offering.
Mobile brands like Samsung and Nokia are also at play in the local market with music offerings of their own. Nokia said it pioneered digital mobile music in South Africa, having realized the potential for this service quite a few years ago.
“We continue to innovate with unique services like the free Mix Radio streaming service for all our Lumia customers, which is seeing fantastic take up,” said Nokia SA spokesperson, Leo Mckay.
Goldstuck – an analyst and commentator on Internet, mobile, business and consumer technologies, and MD of World Wide Worx – was rather blunt in his assessment of what these services would mean to physical retailers. “This is the end of the beginning of the end for physical music retailers.”
Goldstuck said that the beginning of the end really started at the end of the 1990s with Napster, and ended with the launch of iTunes in 2003.
“Within seven years, Tower records had vanished in the USA. Our retailers have had a nine-year breathing space while the music industry desperately held onto the 20th century model of geography-based licensing of distribution in a digital world without borders,” he said.
Goldstuck argued that the Nokia Music Store and Simfy Africa have given the local market a semblance of the digital music experience, but without the integrated experience of all your music, anywhere, anyhow.
“iTunes makes that possible, even though it retains archaic mechanisms like geography and an interface that is not intuitive to all,” he said.
“Nevertheless, this all adds up to the final toll of the bell that heralds the end of the physical music retailer. Already, we’ve seen music retreat in Musica and Look & Listen, and accessories and electronics moving to front and centre.”
“In a few years’ time, the primary presence of music in these chains will be in their brand names,” Goldstuck said.
In recent years, Musica has added a number of accessories to beef up its offering, while rival firm, Look & Listen, has done the same by including an online MP3 download store.
In publishing its results for the year ended August 2012, Clicks Group reported a pre-tax profit of R31.4 million for its subsidiary Musica, which delivered turnover of R895 million.
While Clicks said that that Musica gained market share in CDs, DVDs and gaming, the ongoing right-sizing of the brand resulted in the net closure of a further 14 stores. This contributed to operating profit increasing by 36.3%, it said.
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