April 30, 2003. Copyright, 2003, Graphic News. All rights reserved

Apple Online Music going for a song
By Joanna Griffin

LONDON, April 30, Graphic News:  With its new online music store, Apple ought to make everybody happy. Not only has the computer firm found a cheap, and legal, way for users to download songs, it appears to have restored harmony to the fairly new but still troubled marriage of technology and the music industry.

The venture, recently unveiled by Apple CEO Steve Jobs, will allow customers to download music for their own personal use, as well as make unlimited use of the tracks by ÒburningÓ them onto CDs. Users will pay 99 cents (62p) for each song chosen from more than 200,000 titles by artists as diverse as Eminem, Bob Dylan and Luciano Pavarotti. Downloaded tracks can be transferred to iPod MP3 players and moved to different computers.

The success of AppleÕs iTunes Music Store hinges on the collaboration of the five big record companies: EMI, Sony, Universal, Warner and BMG. All stand to gain from the venture since -- unlike with pirate music services -- Apple will pay them royalties worth 65 cents per song. So far they are on board for just a year, but the current climate will make it hard to jump ship.

AppleÕs venture could come as a welcome balm for record companies tired of fighting pirates, such as the now defunct Napster, who distribute their music online for free. TodayÕs outlaws, led by KaZaA, are harder than ever to shut down since they have no central servers. Partly as a result of such illegal activity, music sales in the United States slipped by 8.2% last year.

Now industry executives are hoping that Apple has found the solution to a problem that has mystified others. Its iTunes Music Store carries on the work started by subscription-based ventures, such as Pressplay and MusicNet, which were set up by entertainment giants but never had widespread popularity because rival backers refused to license each otherÕs songs.

In this sense, iTunes is more evolution that revolution, but Jobs claims that Apple is about to transform the way people buy music. Users who might have been resistant to buying an expensive album on CD will jump at the chance to ÒownÓ an individual song purchased by clicking on a button on the iTunes jukebox, he says. So, has he got the formula right?

A key question is whether users will be willing to pay 99 cents for a song they can download elsewhere for free. At the unveiling of the iTunes Music Store, Jobs said that many customers will prefer to pay a small sum for a legal service than nothing at all for an illegal one. In addition, pirate services are an increasingly frequent target of viruses.

Rival computer executives say the venture will not make much difference to AppleÕs revenues since the company has no experience as a music retailer, and its technology may be surpassed later. A Microsoft version is due at the end of the year. But for now it is likely to increase sales of iPods and Macs, and at least the music and computer worlds are on speaking terms again.
/ENDS