iTunes needs to change. Radically.
There are rumors that Apple will be overhauling iTunes' interface and/or functionality soon. And it won't be easy. Apple could break up OS X iTunes into multiple apps, like on iOS: iTunes, Music, Videos, iBooks, Newsstand, etc. And the Mac App Store is already a separate app, so the trend has been established. iTunes could still act as the content discovery and purchase portal, but shed some its playback complexity. Maybe.
The problem is that splitting up iTunes that way wouldn't really simplify things much. iTunes will still need to have access to all content available from Apple. It has to be the one place where people find and buy everything. Product affinities are critically important to all e-tailers, including Apple. Not just for increasing impulse-item sales, but for learning more about each customer long-term. iTunes' Genius feature depends on affinities, and Amazon is all about recommendations and suggestions. So if Apple isn't careful, plenty of clutter will remain in iTunes' interface despite breaking out the playback features into separate apps.
Not to mention that purchasing videos and songs in separate apps could be a terrible experience. For example, what about podcasts? Some are audio only, others audio and video. Would you need to remember which podcasts are video podcasts, then launch the Videos app to get more? That would be a bad experience and, despite all the attention that iOS and its devices are getting, Apple is really an experience company.
It feels like Apple has been avoiding a radical overhaul of iTunes for too long. Could be because they just didn't know what to do or were too preoccupied with iOS. Or, more likely, they were waiting to put key infrastructure technologies in place first. So what key infrastructure technologies could iTunes leverage that are here now? And what about the near future?
Siri - A voice interface with deep AI could vastly simplify the discovery, purchase, and playback of all media content available through iTunes. It could also act as a "personality" for the borderline-spammy Genius recommendations, or Genius could be merged into Siri's AI functionality. And, a little further down the road, a Siri interface to iTunes could find music by sampling it like Shazam does, or find songs or movies or TV shows by lyrics or dialog that you say to it.
iCloud - It's already being used for iTunes Match, and over the next decade it will be just as important to Apple's growth as iTunes was in the last decade. As iCloud server power increases and wired and wireless bandwidth also increases, there will be less need for processing power in its clients. Ten years from now, iCloud will likely be as different from its current form as iTunes is from its humble "Rip. Mix. Burn." origins.
TV - Sooner or later Apple needs to make a big move in the TV space. The TV set itself (or whatever device Apple releases) will be easy. Trivial. At least compared to the legal and technical issues involved in enabling such a device and its content and services. So now is the time to start preparing the iTunes ecosystem for that TV move. The more naturally the TV solution fits into Apple's experience, if and when it's released, the better for everyone. Except Apple's competitors of course.
Somehow, iTunes needs to stay at or near the center of all of that. It's too big a "brand name." Apple tends to evolve and leverage their existing technologies, sometimes in unpredictable ways. I'm sure we'll all be surprised at what Apple does with iTunes.