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The 10-10-220 of File-SharingNinety-nine cents for all your songs at Apple's new music store.

By Paul BoutinUpdated Tuesday, April 29, 2003, at 11:45 AM ET

The Apple of the music-service worldA few record execs must have wandered into Steve Jobs' reality distortion field. After four years of denial, doublespeak, and lawsuits over digital music, all five major labels—Sony, Time Warner, Universal, BMG, and EMI—have somehow been persuaded by the Apple CEO to finally deliver a music service worth paying for.

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At least, that's my verdict after a morning spent with the iTunes Music Store, unveiled today at one of Jobs' famous stage ceremonies in San Francisco's Moscone Center. The store is built right into a newly downloadable version of the iTunes software for the Mac. Just sign up with a U.S. credit card for an account at the Apple Store (iTunes walks you through this if you haven't already bought from the Apple Store in the past), and you can download any of 200,000 songs—from Franz Joseph Haydn to Eminem—provided by the five major labels. Most are 99 cents, although new tracks that you can't buy on CD (such as Eminem's "These Drugs") are bundled with other exclusive songs and sold in packs of two or three ($1.98 and $2.97, respectively). You can listen to 30-second clips of everything in the store, and you get to keep songs you buy forever, even if you sell your current computer: Apple lets you designate up to three computers as "yours" at any one time and will play your songs on any of them. Plus, if you've got an iPod, you can transfer your music to it and take it with you.

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Last year, Bill Barnes tried to figure out which music-sharing service would become the "next Napster." In "Is the Computer Desktop an Antique?" Steven Johnson argued that Apple's "iApps," such as iTunes, may displace the desktop metaphor for computer operating systems.

The downloads come in the AAC format supported by Apple's computers and iPods. Even at a modest 128 kbps, AAC sounds better than most MP3s, although that may be because professional encoding sounds better than at-home amateur ripping. More important, AAC is unfettered by the clunky copyright protection technologies that keep other pay-to-play music services' tunes from playing outside your PC (and sometimes inside it). Apple has built a few roadblocks into iTunes to make it tough to pass around free copies of a song after you've paid for it, but enterprising students are picking the locks already.

The iTunes Music Store's real innovation isn't its technology. It's the pricing. By getting the major labels to sell one song (or at most two or three) at a time, Jobs has broken the album-oriented business model that's served the music industry ever since Columbia introduced the long-playing record in 1948. Usually, a hit single is sold as part of an album package, a proven hook to get buyers to justify forking over $17 because they like one song. In their more honest moments, music execs admit that albums are a bait-and-switch tactic, a lucrative one they're reluctant to give up without a proven alternative. That's why, four years into the post-Napster world, none of the major labels have tried the buck-a-song approach before.

Except for once: EMusic offered 99 cent downloads from big-name artists. But EMusic's deep-pocketed funders switched the service to a subscription offer in 2000, convinced by surveys of Napster users who said they'd gladly pay 10 or 20 bucks a month for a service like it. But Napster had every song you could ever want, so of course you'd subscribe.

The labels mistakenly thought that online subscriptions were the way for them to make money from digital consumers. It made sense on the surface—people happily subscribe to ISPs, cell-phone services, even Web sites. Music buyers rejected the actual offerings, though. Products like Yahoo! Music and PressPlay (and the iTunes Music Store) offer only a subset of all the music you might want, depending on which labels they've signed up. And unless you read Billboard, you'll never know what's missing until you try to download it. Can you name which label Fischerspooner is on? How about the Dixie Chicks? If I commit $120 for the next year to PressPlay and an equal amount to RealOne will that get me every song I want in 2003, or will I have to pay yet another service to get it? No wonder the kids are all on KaZaa.

For the first time in three years, iTunes lets music buyers pay for only the songs they want. No more albums bundled with unwanted songs, and no more monthly fees. If you like the Chicks' version of "Landslide," it's yours for a buck. If, instead of buying the rest of the album, you'd rather cull 16 more songs from other artists, you can. Need "We Will Rock You" for the big school rally? Ninety-nine cents. The company hasn't said whether or not it will carry music from independent labels outside the big five. But if Apple doesn't carry your favorite song, who cares? You didn't pay them any money anyway.

Still, it's hard to say after one morning if Apple's music store will be a hit. The initial 200,000-song catalog isn't really that big—still no Fischerspooner despite the band's album on EMI and frequent MTV appearances. Plus, iTunes doesn't work for Windows users. Is it enough to make you buy a Mac? Probably not.

But for once the price feels right rather than a rip-off. The suits from the big five labels find themselves squinting into a bright new future, one in which they'll still get my dollars. But now they'll have to earn them one at a time.

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Paul Boutin is a writer living in San Francisco.

COMMENTS

Remarks from the Fray:

I want to pay less (on a per song basis) than it would cost me to buy the CD in question. And I want the music portable (both to a mobile player and burnable to a CD). Say I want to re-create a CD pretty much exactly as it's being sold. Or even create my own mix CD. The economics are the same either way. Since I am the one who's taking the time (I hesitate to say "labor") to download, assemble and burn the music, and since all the associated costs with actually making the CD are saved by the record company (jewel case, cd box, cd, ink, distribution etc etc), I think that I should share in these savings. If people were able to download songs they wanted for 50 or 75 cents or so to the song, and the quality was professional, it seems to me that this could be a viable venture. Many people are still going to want to go buy the CD - for the jewel case, art, the inability or lack of desire to burn their own - but this then would be a way for the record companies to make money (and a fair amount of it I bet) on top. But until a service comes along that has a) the pricing and b) the selection (undeniably a hurdle for those of us that mostly forswear commercial radio), I and many like me are going to continue to use Kazaa et al.

--covoj

(To reply, click here)

The interesting question is how long will it take others to copy this model from Apple & join in? Not that this is a bad thing mind you. Apple has a history of making innovations (or "borrowing" others innovations and putting them forward in the case of Xerox's GUI) which have become commonplace, such as: the Graphical User Interface coupled with a mouse, the elimination of the 3.5" floppy disk drive in favor of using either the internet or other technologies for basic file transfer, putting USB as a standard on-board data transfer system, same with firewire, etc. And others follow closely behind, usually bettering Apple's efforts in some, if not many, ways - price being foremost among those. I've always felt that if you want to experience the "new new thing" in personal computing, it's great to have an Apple. Once the new thing isn't so new, Apple's advantage in that particular market niche vanishes. I echo the author - would love for others to join in and break the 16.99 per cd monopoly. This is a medium that screams to be adapted for the 21st century. I think a big 1st step was taken today.

--JCormac

(To reply, click here)

As a technology watcher, a Mac addict, and a music fan, I anxiously read today's announcement from Jobs and Co. I have lots of feelings. Hey covoj, I'm not sure what it is you want. You say you want a service that'll let you download music you can burn or take with you on a portable player. Apple's service does that. You want to pay 50 to 75 cents per song? Apple's service almost does that ($.99 per song, but there are "pakage deals" available that let you get a few songs at a time for a discount). You want selection? Apple's got all five major record companies on board. I agree with you, JCormac. It's a matter of time before someone else manages to capitalize on Apple's model. You say that this is a cycle: other companies grab onto Apple-initiated technologies and make them better or cheaper. I can't think of a single one that's been made better, but lots that have been made cheaper. And cheaper technology is a double-edged sword. You allow the masses (read: people not willing to fork out the dough for Apple-brand quality) access, but you dull the beauty of new, spiffy uberinventions by cheapening them. iPod is the perfect example. Apple wrote the book on high-capacity, high-speed music players. There's not a single one on the market that matches it for sexiness, style, and functionality. But there are several that deliver high-capacity, high-speed in an iPod-like package for a cheaper price. I worry that's going to be the case with the new Apple Music Store. Someone else is going to replicate it (and do so for the WinPC world), but do so without the attention to detail, the ease of use, and the pure beauty with which Apple did. I really think Apple made one big mistake here. The article in FORTUNE says Jobs and Co. are working on a Windows version of iTunes and the Music Store. Had those been ready for release today -- instead of Apple insisting on coming out with a Mac-only version first -- then the new service would have been both revolutionary and successful. Now, since only those of us with Macs can use the service, I worry it won't catch on, people will stop talking about it, and failure will be soon-coming. I hope I'm wrong.

--BarkinJ

(To reply, click here)

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