ITUNES

iTunes



Section I

Executive Summary

The American Association of Independent Music (A2IM) served as an independent music industry that included over 30% of the Music Industry's market share in the U.S. (38% of digital sales). As commercially driven industry, A2IM's changes in technology lead businesses to adapt in order to keep up with the market demand and consumer interest. As the CD began to decline, digital music downloading became a powerhouse of an opponent, forcing the industry to change gears and grasp the new form of music content. The A2IM's lethargic reaction and response towards the MP3 led it astray in terms of controlling it and profiting from it. The lack of retention regarding the digital rush seemed to penalize the industry, as users soon learned other ways to utilize the new format and fill their consumer needs. In the past four decades alone, we've seen vinyl lead the way to the cassette, which eventually paved the way to the Compact Disc. Since its creation in the mid-80's, the CD slowly escalated into the hands of music lovers as the cassette began to be viewed as conventional technology. Better sound quality and the ability to skip over tracks led the cassette to become extinct, hence, yet another quite dramatic format change for the industry. As the CD's popularity grew, it soon became the only choice for music consumption available.

It's no secret that music downloading profoundly affects the A2IM today. In 2005, “Music Week” reported that the amount of legal downloaded singles had outsold those of tangible product for the very first time (2005). Also, reported was the fact that CD sales for the year of 2005 were down 4%, and sales for the year 2006 were down an additional 5%. CD sales do not seem to be going anywhere but downhill; as of May of 2007, CD sales plunged an additional 20%, “far outweighing any gains made by digital sales at iTunes and similar services”. What is wrong here?

In order to fix the problems that slowly crept up on the A2IM music industry, it is going to have to recognize downloading as the primary source for music consumption. Within five years, A2IM's project that production of CDs will be finished, coinciding with the trend of further decreasing sales of physical units. Mobile media is and will be the future of the industry and music downloading. A2IM is going to have to recognize that users want access and the ability to use music in any way they choose. Even though, iTunes appears to be the solid forerunner in the race for control of the downloading realm in A2IM, even Apple can make its music store easier and more comforting for users.

Section II

Synopsis

The conceptual model of American Association of Independent Music (A2IM), is presented in Figure 1, visually illustrates the complex and integrative dimensions of leadership and organizational change, positioning it within the fundamental context of the relationship of the organization to their immediate community and society at ...