Steve Jobs to Studios: I Got the Power!

Nivi Has a fascinating analysis of Apple's power in the media distribution market

Let’s see what Mr. Jobs revealed in the keynote:

"This next statistic we have never shared with anybody before… We have just crossed 10 million accounts on iTunes and they come with credit cards." Subtext: It is a 1-click experience for 10 million customers to give us their money for pure digital content.

"With ten million acccounts that makes iTunes one of the largest Internet stores around… as far as we can tell, iTunes may be the second largest Internet store behind only Amazon." Subtext: There is no competition for distributing purely digital content.

"The average account has purchased around 60 songs… most of these accounts have been added in the last year." Subtext: We have successfully taught customers to buy pure digital content and they know how to buy it from us not you.

"Let me compare [the iPod] to another very successful comsumer product, the Sony PSP, the iPod sold over 6 million last quarter, the Sony [PSP] worldwide sold 2 [million]." Subtext: Even the Godfather of consumer electronics can’t touch us (and Sony is probably selling their hardware as a loss leader).

Jobs showed how the iPod nano crushed competitive products from iRiver, Creative, Samsung, and Sony, one by one. He went out of his way to mention each of his competitor’s products by name which he rarely does. Subtext: These guys are so dead that I can give them a little free advertising. And yes, I am talking about Sony too.

Jobs pointed out that there is a massive ecosystem built around the iPod. Paraphrasing him: "There are over 1000 accessories for the iPod and 30% of all cars sold in the U.S. in 2006 will have iPod docks." The iPod nano went out of its way to maintain compatibility with the 30-pin dock connector that is used by existing iPod accessories. Subtext: A competitive hardware product would disrupt the accessories that consumers have already invested in. It’s not going to happen.

via Take One Onion