Thursday, October 30, 2003

: In the last month the music-downloading landscape online has shifted once more with these five major events, not all of them good:

¶Apple Computer made its iTunes player and music store available to PC users.

¶A legal version of Napster emerged.

¶A new download store called Audio Lunchbox announced that it would open on Halloween.

¶Musicmatch added an online store to its music player.

¶EMusic added restrictive rules to its music subscription service.

In a striking lack of originality, every new service above is in some way a designer imposter of iTunes, which sells songs for 99 cents each and albums for $9.99.

The war for a legitimate digital-music store began in 1995, when a New York company called Sonicnet started offering singles for download. The artists were allowed to set the prices of their songs and to keep all the money from the download. Of course, in those olden times, a download could take anywhere from five minutes to five hours, and the sound quality was described by the company itself as "better than an AM radio in a '72 Nova."

Clearly, Sonicnet's music store was more of a me-first venture than a moneymaker, but the message was clear: the Internet was a place for artists to control and directly profit from their music. But in most online services today that dream has been lost, with the services functioning as online arms of the record companies while the artists receive pennies (or fractions of pennies) for each download.

The second dream from the golden age of music downloading was summarized in a catchphrase: All you can eat. The future of the business was in allowing fans access to all the music they wanted for a monthly fee. So far, only the free unauthorized services have accomplished this, chiefly ones that are now defunct, like Napster and Audiogalaxy. The reason the authorized downloading services haven't accomplished this goal is not because the technology or will is lacking, but because full cooperation from record labels and publishers has not been forthcoming. They fear they would become obsolete.

Thus the authorized services online today are all compromises. The service perceived as the greatest success is the iTunes Music Store, originally a feature of the Macintosh computer. The service is based more on the retail model than the cable television one. Its charges of 99 cents to download a song and $9.99 to download an album are not much cheaper than buying the CD at a discount retailer. Within four days after iTunes began offering a PC version of its technology this month, one million PC users had downloaded the software, Apple reports.

With the success of the iTunes Music Store, other services are rushing to copy it. By and large, they are not succeeding, because what works about the iTunes Music Store is not necessarily its pricing system but its ease of use, its lack of restrictions on downloaded music, its design and its integration of Apple's iTunes media player and iPod portable digital music player.

Nonetheless, that hasn't stopped the competition. There's Buymusic, an online song store that has little going for it, and Musicmatch, which has integrated an Apple-like store into its music jukebox. And the newest service, Audio Lunchbox, tries to squeeze into a gap by offering music for Mac and PC users that the iTunes Music Store does not: chiefly songs from artists on independent record labels.

Perhaps the greatest competition for iTunes on the PC is the new and very legal Napster 2.0. The service combines the song-selling of iTunes (even the prices are the same) with a semblance of the community feel of the original Napster. Users willing to pay $9.99 a month for a subscription get extra features, such as being able to listen to the playlists of other members, access to message boards and a personal mailbox and the ability to download as many songs as they want onto their PC (but with a catch: they still have to buy the song if they want to take it off their home computer and put it on, say, a portable digital music player).

But iPod owners won't be flocking to Napster because its songs are encoded as Windows Media files, which are not compatible with the iPod. Samsung, however, has created a digital music player specifically designed to be used with Napster 2.0.

If it sounds as if it's a mess out there in the online retail world, it is, and ultimately only a few services will flourish.

Online Music Business, Neither Quick Nor Sure

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