Dispatch from iTunes Festival 2013: Music matters to Apple by Philip Elmer-DeWitt @FortuneMagazine September 2, 2013, 2:01 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons Photo: Jim Dalrymple By Jim Dalrymple, London FORTUNE — When people think of Apple AAPL these days, most will immediately conjure up images of the iPhone and all of the apps they can download for the device. However, the iTunes Festival shows that music still matters to the company. I attended the opening of the iTunes Festival in London, England, last night with headlining artist Lady Gaga. It was a splendid show complete with stage props, dancers and choreography that you would expect from one of the world’s most popular acts. The acts Apple books for the iTunes Festival are world class—Elton John, Lady Gaga, Katy Perry, Justin Timberlake, John Legend—all top notch performers. The concerts are completely free for concertgoers and Apple streams the shows free for anyone that has an iPhone, iPad or Apple TV. So what is Apple getting out of running iTunes Festival? As subtle as the message is, I think Apple is telling the world that music still matters to them. The iTunes Store is what helped Apple become the company it is today—the iPods and selling music online transformed Apple into a household name that made consumer products, not just Macs. When the iPhone and iPad started to take over the consciousness of consumers, apps became the main focus for everyone. That doesn’t mean we stopped buying music—in fact, we probably buy more music now than ever before. Music just became one of the things we expected to be able to download and listen to with our devices. Apple has more than 500 million active iTunes user accounts and users have downloaded more than 25 billion songs from iTunes. That’s an incredible number of songs legally downloaded and paid for by Apple customers. Apple could make a fortune by charging even a little bit for each concert at the iTunes Festival, but they don’t. Tickets are free for every show. They could hold the show in a huge venue, but they chose The Roundhouse, a venue that holds about 3,000 people. The Roundhouse is an intimate setting for the artist and fan—it’s a shared experience that you can’t get from a giant concert hall. To me, iTunes Festival is Apple’s way of giving something back to the community. It’s Apple’s way of saying that music still matters to them as much as it matters to us. BIO: Jim Dalrymple is the founder of The Loop and has been reporting on Apple for nearly 20 years.