Who Profits From Musiceuticals?

I've been wondering which companies might benefit from Musiceuticals. It's clear that Musiceuticals define a a new categorization of music, which means a new user experience. The two main results of the new user experience? Differentiation for the music or music system provider and new exposure for certain music and artists. Let's think about the first of these today. In thinking about music system providers, the question "Which companies benefit from Musiceutical innovation?" is the same as the question "Who benefits from differentiation?"

So who does? Well, Apple already used differentiation to dominate the industry. With 3 out of 4 music players some sort of iPod, Apple is riding that differentiation to the bank. Problem is, what's their motivation to take another leap? They seem more focused on hardware and video innovation than music user interface innovation lately. And it's certainly clear that if they DON'T focus on Musiceuticals, they won't want anyone else to…for the obvious reason that another company's strength in Musiceuticals creates a competitor with a real advantage over iTunes/iPod. By the way, since any Musiceutical data set is going to require lots of user data (see What Systems Do Musiceuticals Require below), the company with the most users--Apple--is actually best positioned to have the best Musiceutical data in the shortest time. But it is still hard to see them rocking their very profitable boat.

So who else? Microsoft Zune and Zune Marketplace seem the most obvious. Microsoft has given up on an open MP3-based music ecosystem because, well, they got crunched. So they recreated iTunes and iPod (with that ever-so-sexy flat brown look) and are poised to take over the music industry just as reinventing the Macintosh allowed them to own the computer industry. Will it work? Hmm. Lower user base. Stodgy image in a hip-oriented music world. Fewer songs (at least today). A bigger screen (but no better resolution). And players that really do look like your father's Oldsmobile. It seems like few today think they'll win, but you rarely win betting against Microsoft (not never, but rarely). They need differentiation. Differentiation that makes the music experience better. They are one company that needs Musiceuticals. And, of course, in the Zune world, they do indeed control the Systems Required by Musiceuticals….