Europe iTunes Store
Transcript
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Are you ready?
ise
And I'm speaking and I'm looking at a boy
No one tells what to do with your high-top shoes
And your wavy colds with a black shorts
Don't let him get away
Don't think they complain
Kneel up to the wall cause you really need to say
Gotta call it 30 days
I can't breathe in my right back
Turn around jacket
He said he don't want to die
But he's faster than me
Show my walkie-talkie man
Last night at the show he signed
We're walking and talking
Going out of the street
Go, go, go, go
We are walking and talking and moving and grooving and hip and hop and pick and I'm about to be a badge
Better take a ring my five, man
Turn around, jack it
He's mad and he's on the street
We are walking and talking
But he's back to the man
My walkie-talkie man
Last ride at the show
We are walking and talking
Going out of the street
Go, go, go, go
We'll be right back.
He's a walkie-talkie
Good morning.
Thank you.
Thank you all for coming.
Well, we're here to talk about iTunes today, clearly.
And for those of you that have never used it, iTunes is the best music jukebox in the world.
and if you've lived in the U.S.,
it's been the best online music store in the world.
And we're pleased to report today
that we've sold over 85 million songs
that have been sold and downloaded online,
setting a new record.
So we're within striking distance of 100 million songs.
It's amazing.
And this is in just a little over one year.
The iTunes music store has a 70% market share
of all legal downloads.
70%. But that's only been interesting if you lived in the U.S. until today. Because today,
we're introducing the iTunes Music Store into the U.K., Germany, and France. Now, these
three countries represent over 60% of current European music sales. 62%. And they represent
23% of global music sales. So this is a huge chunk of the global music sales.
UK, Germany and France. Now, before we show you the store or the stores, I want to go
back to the beginning and talk about the philosophy behind iTunes. And there's no better place
to start than who does iTunes really compete with. Now, in the US you might say it's Napster,
Rhapsody and Music Match.
Over here, in Europe, you might say it's OD2 and Virgin.
But this isn't really true.
Because iTunes has a 70% market share.
All the rest of these guys put together, you know, are 30%.
It's not really who...
iTunes competes with. Who iTunes really competes with is this. It's piracy. This is the big
market for downloads. And if you don't think it's so big, take a look at this. This is
what the piracy, this is how piracy has impacted the music market in these countries. It's
brought it to its knees in the UK with zero growth last year. But that's phenomenal compared
to what it's done in Germany and France. The market shrunk in Germany by 19% and it shrunk
in France by 14%. So, piracy is a really big market and this is our competitor. So, if
you're going to compete with piracy, you have to understand it and you have to offer a better
product. And that's what we've tried to do. So, let's understand piracy first. When you
How many of you have downloaded a song illegally?
Go ahead.
I tried it.
Yeah, because I like market research.
And what I found was you get really unreliable downloads.
You search for a song.
You don't just find one song.
You find 200 copies of that one song.
And some people say they have a really fast interconnection.
You go to download the song and you find out they fibbed.
So the song downloads really slow.
The next one craps out halfway through.
And you have to try several times before you actually get the song.
But when you finally get the song, you find that it was encoded by a 10-year-old,
and the last four seconds is cut off.
So you have to start the whole process over again.
So you have very unreliable downloads, and you have very unreliable encoding.
You also don't get previews of the song.
So you might have wasted all this time downloading the wrong song or the wrong version of the song.
And you don't get album cover art, which everybody would like to have.
And maybe most of all, it's stealing.
Right? It is stealing.
So, what are we going to do about this? How are we going to offer a better product?
Well, the first thing we're going to do is replace unreliable downloads with fast, reliable downloads.
Coming off of our giant server farms, we're really good at this.
We give very fast, very reliable downloads.
Next, we're going to replace unreliable encoding with perfect encoding.
We encode everything ourselves. We check everything. It's great.
very high quality pristine encoding.
No previews, we're going to replace with previews of every song in the store,
free 30-second previews, and they're in high fidelity.
They're in the same quality as the downloads,
so you don't have to listen to previews at a much lower quality like other people do.
Obviously, we're going to give you great album cover art,
and it's not stealing, it's good karma.
So this is the basis for fighting piracy.
Now, we're going to combine this with landmark personal use
rights.
And so what are we going to let you do with the music?
Well, first of all, you own it.
There are no subscription fees.
The experiment's been run.
People don't want to rent their music.
They want to own it.
They bought cassette tapes.
They bought CDs.
They want to buy downloads.
If you, you know, your favorite song you listen to a thousand times in your life.
If I, I'm going to be listening to my favorite song in ten years.
If I have to pay seven, eight, nine, ten pounds a month to listen to my favorite song,
after a year, I mean after ten years, that's over a thousand pounds.
To listen to my favorite song.