iTunes & Other Business Models


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iTunes & Other Business Models

  1. 1. A look atother business models of itunes: the a la carte and advertising model<br />1<br />
  2. 2. the a la carte model<br />
  3. 3. iTunes and the A La Carte Model<br />3<br />
  4. 4. iTunes, the A La Carte Model & the Economic Basis of Internet Commerce<br />This model may also have the effect of disciplining pricing rates overall if there is a rise in the number of people subscribing to iTunes and this particular model<br />Capitalism offers freedom of choice as well as consumer sovereignty, which is why iTunes and the a la carte business model are very much in line with each other<br />each other<br />The price system in the capitalist economy acts as a rationing device, which explains why the a la carte model is available for those who can afford to pay for such service and save money to avoid unwanted programming<br />All in all, iTunes is recognised to have supreme power in the music industry and bringing innovation endlessly to create dynamic efficiency<br />4<br />
  5. 5. the advertising model<br />
  6. 6. Apple’s acquisition and iAds<br />Apple is also known to have adopted another business model – <br /> the Advertising model<br /> Above all, the acquisition of Quattro Wireless by Apple for $275 million in early January 2010<br />Then, the launch of Apple’s iAd in April 2010<br />iAd gives brands what they’ve been waiting for: access to the global audience of iPhone and iPod touch users, enhanced targeting, premium creative and robust measurement (, 2010)<br />iAds system actually uses a plethora of subscribers information including their demographics, iTunes purchasing history, location data, application preferences, and any other download or library information it can find out about them, to determine what ads they see<br />6<br />
  7. 7. Other Facets of the Advertising Model<br />Apple and iTunes have also been engaged in other promotional campaigns too to initiate the advertising model<br />For instance, in 2003, Apple and Pepsi launched a momentous promotion to legally give away 100 million free songs to Mac and Windows PC users from Apple's iTunes Music Store<br />Today, iTunes 360 is a marketing and advertising program co-funded by iTunes and content providers to promote music, movies & TV shows hence supporting this model<br />Moreover, with the iTunes Affiliate program, Apple-designed marketing materials can be accessed for use in website, email, and online promotions<br />Link to music, TV shows, movies, audiobooks as well as applications in the App Store and earn in turn a 5% commission on all qualifying revenue<br />7<br />
  8. 8. Way to Go!<br />Despite the competition with Google who acquired AdMob for $750 million, a Quattro competitor, Apple is still the market leader in the industry and is determined in shielding its position given the advent of unremitting innovation, services, products, and business models<br />iTunes has always been creative in and innovative in line with promoting sustainable business models and brand loyalty by keeping in mind how the concept of network effects<br />can benefit the organisation in the long run<br />8<br />