The iTunes Model

We have moved into a new era in consumerism and opportunity.  The iTunes Model is upon us in far reaching numbers and it will not be long before other mediums chose this option.

The obvious one is clearly the age old favourite of books, magazines and newspapers.  It with great pleasure that I recently acquired the newest gadget in the “gadget person” life being the Amazon Kindle.

I was initially skeptical that I would like the 6″ screen and had considered waiting for the 10″ international version. But alas, Christmas came upon me and I had to “select” a present.  I therefore bit the proverbial bullet and acquired the Kindle.  I can now gladly write that 6″ is plenty for reading a book with the e-ink technology.  In actual fact, it is perfect for holding something for as long as you need to read a book.  If you effectively place a Kindle on top of a normal paperback book it is almost exactly the same size – and to date I have not heard too many complaints that paperbacks are too small to read.  In any event, we stare at iPhones, iPods, and other hand-held devices and don’t complain.  In this case this device is specifically developed to be a paperback book and for that it is 100% successful.  So I proudly place next to my “Apple” badge the Amazon Kindle badge.

Just like the iPhone/iPod, I went a little crazy downloading books and already have around 15 books/magazines (2 subscriptions) already on the device.  It was just too damn easy to download the content.  Hence the iTunes Model is clearly evident in the Amazon Kindle.  So where else?

We are already starting to see commentary on the newspaper model being revolutionised by the iTunes Model.  The question is what is next?  I am sure people have many opinions on this, some will share and others will not (most likely because they are looking at being the landscape changers themselves).

Will we set it appear in medicine (download your own treatments) or perhaps it will revolutionise the retail food industry?

As always, I will throw the risk lense across this one – and highlight the need for business to consider a number of key risks.  Primarily:

  • the technology risk that goes with concentrating all users to a single service,
  • the fraud risk that will occur over any product that appears on the internet and allows customer payments (or linked credit cards – I would be interested to know of any fraud attempts on iTunes to date?)
  • the operational risks associated with delivering a service through this manner – both in the online processes but also the back end processes the need to deliver to the customer,
  • the reputation risk associated with ensuring the product maintains its “dignity” and does not lose customer acceptance through such a model, and finally
  • the compliance risks associated with any endeavor that involves the establishment of a contract with a customer and ensuring the terms and conditions meet legal and regulatory requirements, as well as covering the privacy and SPAM risks associated with online content.

It is going to be an exciting “iTunes Model” future for us all.


Scott North has extensive experience in enterprise risk management, internal audit, operational risk and compliance, risk strategy, scenario planning, technology risk, technology business analysis, systems design, financial accounting, and management accounting. Scott is a Fellow of the Australian Institute of Chartered Accountants with a Masters Degree from the University of Melbourne in Business and Information Technology. Scott is also a Fellow of the University of Melbourne.

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