iTunes Music Store will ‘alter balance of power’

Apple’s new iTunes Music Store “promises to forever alter the balance of power in musicland,” Alex Salkever writes in the latest Byte of the Apple column for Business Week Online.

Calling the service “very marketable, very easy-to-use, and very pretty,” he says it should earn millions of dollars in download fees. Salkever thinks the 99-cent per download price may be a bit high, but feels the market will either prove him wrong or force Apple to go lower.

However, he believes that Apple’s maneuver “will go down in history as the final straw that broke the back of the old music-distribution system — and the industry’s pyramid hierarchy that gives big stars big treatment and gives nearly everyone else squat.” Recent developments, which Salkever elaborates on in his column, set the stage for such a shift and lay out a new direction for the record labels.

“The take-away from all this is simple: Apple is heralding a new era of online retailing, where the retailers will have the same kind of brand recognition as Apple — perhaps Amazon, eBay, or Yahoo!,” he writes. “The labels will from now on play this game at a distinct disadvantage not only because they lack a true brand name but also because they have forever lost control of distribution.”