Apple Launches Paid Music Service

Wired News ^ | 4/28/03 | Leander Kahney

[Brett66]

Apple Launches Paid Music Service

By Leander Kahney | Also by this reporter Page 1 of 2 next

01:46 PM Apr. 28, 2003 PT

SAN FRANCISCO -- Apple CEO Steve Jobs unveiled a slick and easy-to-use song download service on Monday that some experts said breaks down the barriers to online music distribution.

At a big launch event in downtown San Francisco, Jobs showed off Apple's new iTunes Music Store, which makes more than 200,000 songs from all five major music labels available at 99 cents a download.

"The Apple online music store is going to be the hottest way, we think, to acquire digital music," he told the crowd of 200 press, musicians and executives from the music and computer industries.

Dressed in his trademark jeans and turtleneck, and looking fashionably stubbly, Jobs said the service strikes the right balance between the convenience of downloading music over the Net and the need for the industry to get paid.

The service, he said, allows Apple to refashion its controversial mantra from a couple of years ago, "Rip, mix, burn," into the much more music industry-friendly "Acquire, manage and listen."

Built into iTunes (and already dubbed "Buy Tunes" by wags), the service is being hailed by musicians, analysts and executives as a breakthrough in online music distribution.

"It's great news for the whole industry," said Dennis Mudd, CEO of MusicMatch, who attended the event. "For the first time the labels have licensed downloads that have reasonable rules for use. It's the first pay-music service that's better than illegal music services."

MusicMatch offers a rival streaming service called MX, but has also partnered with Apple to provide jukebox software for the Windows' version of Apple's iPod.

Mudd said Apple's negotiations with the labels has finally broken down most of the barriers to online distribution. Now that Apple has struck digital distribution deals with the majors, he expected it would be a lot easier for others to do so also.

According to Jobs, the Internet was "built for music delivery," but to date no legitimate delivery mechanism rivaled the scope and convenience of file-trading networks like Napster or Kazaa.

Jobs argued the convenience, quality, reliability and "good karma" of Apple's new service will overcome the attraction of getting songs for free from file-trading networks.

The service dispenses with subscriptions, offering 200,000 songs from all the major labels a la carte. Jobs said new songs are being added daily.

Onstage, Jobs demonstrated ordering and downloading songs with a single click. The entire online library of songs at the store can be previewed as 30-second clips.

Songs can be burned in unlimited quantities to CDs or transferred to Apple's iPod player, which is closely tied into the service. At the event, Jobs also unveiled a new line of redesigned iPods, which now offer 30 GB of storage, enough for 7,500 songs.

According to Jobs, the service suffers from none of the drawbacks of file-trading networks or the current crop of online music services.

Consumers can be assured of quality and reliability. Once bought, they can keep songs for as long as they want, share music on up to three Macintosh computers, and transfer songs to any number of portable iPods or CDs.

"It's not free, but it's 99 cents a song, pretty doggone close,'' Jobs said. "There's no legal alternative that's worth beans."

Rest of article here:

PT-2

[Asclepius]

I hate my powerbook.

[SamAdams76]

Price point is too high for it to succeed in my opinion. Consider that there is roughly 10-18 tracks on a typical album. At a dollar per track, you are pretty much paying the same price as you would in a record store. That dollar per song adds up fast. I just don't see people flocking to it. In order for this venture to succeed, you have to give the consumer a price advantage.

A more reasonable fee would be fifty cents for the "A" tracks and maybe a dime for the "B" tracks. Thus the typical album that has 3-4 "A" tracks (the singles) and 8-10 "B" tracks could be downloaded for between $2.30 and $3.00. I believe that is the pricepoint that would really cause people to flock to this service. Being that there is virtually no overhead in such a venture, the profit margins would still be there in a big way.

[dts32041]

Mac only, liberal elitest strike again.

[BOBTHENAILER]

A more reasonable fee would be fifty cents for the "A" tracks and maybe a dime for the "B" tracks.

I couldn't agree more. Most albums have no more than 1 or 2 A tracks amd a whole lotta times I like the obscure B tracks better. That system would make the industry a friggin' fortune.

Even the dog albums would get more sales. Unless I'm rock solid sure of a least 5-8 "hot tracks", I never bother buying the one hit wonders anymore.....way too expensive.

[targetpractice]

It's 99¢ per track or $9.99 per album. Buying a song is like buying a can of soda.

[George from New England]

Who knows the limitation of these .AAC files ?

Probably a special, Mac only, player, right?

[KateUTWS]

Looks like you can only join if you are on a Mac.

[SamAdams76]

Still too much money. They are essentially charging what you pay in a record store. Where's the incentive for the consumer? If I'm going to pay $10 for an album or $12-20 for a custom-made album, I might as well just buy the CD at the store. And those who can't afford $10 or more for a CD are just going to keep downloading the MP3s and burning their own albums.

I think you should be able to download an album for $3 tops. Anything more is highway robbery and most consumers simply aren't going to go for it.

[MrsEmmaPeel]

Well, Apple sales are down 65% from this time last year, they'd better think of something. Personally, I doubt if this will do it for them. Got rid of my Apple stock quite a while ago. Speaking pragmatically, I can't see myself coming back as a shareholder any time soon.

[BOBTHENAILER]

Probably a special, Mac only, player, right?

If true, I'll never use it, just for the coercive nature.

[savedbygrace]

Most of the 99 cents goes to the record companies, etc.

I think the idea is that there are only 1 or 2 cuts worth paying for on most albums, so it costs you two bux to DL those two cuts, rather than $15 for the whole disc. They're banking on the concept that many people would be will to pay two bux for two cuts, rather than $15 for two good cuts and a bunch of losers.

Time will tell.

[Monty22]

""It's not free, but it's 99 cents a song, pretty doggone close,'' Jobs said. "There's no legal alternative that's worth beans." "


wtf?! That's pretty close to how much a whole cd would cost!

[MrsEmmaPeel]

.99 cents a track seems a rip. Even if you loved every track, you know and I know that there are artists who have some very short tracks -- say 20 tracks. At .99 cents a track, its cheaper to buy the $15.00 CD.

[BOBTHENAILER]

I think you should be able to download an album for $3 tops. Anything more is highway robbery and most consumers simply aren't going to go for it.

You got that right. A side benefit would be the artists would take more care to create CD's loaded with top notch tracks.....more sales.

If they get whiney about it, put a certain level of downloads to acheive the fifty cent status....say 300,000 plus and you make the grade. Shoot, with today's technology, you could have a sliding scale based on sales from a penny a load up to fifty cents. If they really want to make big money, let the marketplace dictate, like everything else. Right now it's a little skewed.

Whatcha think about this MUD?

[SamAdams76]

I hear what you are saying but people who download these tracks are going to want to burn them to a CD. Not many people are content to burn just two songs to a CD when they can fit as many as 20 four-minute songs on one. So that's $20 right there to fill a CD. This isn't going to motivate anybody to stop using KaZaa or Gnutella.

Now if you could fill a CD for about $3.00, that's a whole different scenario. That is an acceptable price for many and well within the budget of most people to download and burn at least a couple of CDs a week. At that pricepoint, people will be motivated to move away from the file-sharing services because let's face it, it's a pain in the neck to find and download the songs you want there. Oftentimes, you get crappy files and you have to search and download all over again. If people knew that they could download clean (and legal) high-quality MP3s for a nominal fee (fifty cents for "A" cuts and a dime for "B" cuts), they'd flock to it.

[KarlInOhio]

How many days (or hours) until the crack for the format is released on the net?

[Brett66]

This isn't going to motivate anybody to stop using KaZaa or Gnutella.

Yep, I was thinking that before I read the first line. I don't know much about Macs, but they can't use Kazaa or Gnutella can they? Would an .mpg that works on a PC, work on a Mac?

[savedbygrace]

You're forcing me to repeat myself: Time will tell.

Our opinions today mean little to nothing, but in a year or two we might be able to tell whether this has been a good move or not.

[SamAdams76]

Yeah, but if adopted the motto "time will tell" and refrained from stating our opinions on anything, this would be an awfully quiet place!

Actually I'm looking forward to bumping this thread six months or a year from now when this service either lowers its price-point or goes belly-up. This is reminiscent of when online services like Prodigy charged $3.60 an hour. I used to carefully allot myself 10 hours a month. Now that I pay a flat fee, you can't get me off this computer!